Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

MESSAGE FROM THE QUEEN

DOUBLE TAXATION RELIEF

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:
I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Latvia) Order 1996, the Double Taxation Relief (Taxes on Income) (Denmark) Order 1996, the Double Taxation Relief (Taxes on Income) (Finland) Order 1996, the Double Taxation Relief (Taxes on Income) (China) Order 1996 and the Double Taxation Relief (Taxes on Income) (Republic of Korea) Order 1996 be made in the form of the drafts laid before your House.
I will comply with your request.

Oral Answers to Questions — TREASURY

Endangered Species and Products

Mr. Tony Banks: To ask the Chancellor of the Exchequer if he will give details of seizures made by Her Majesty's Customs and Excise of endangered species and products during the last 12 months. [4856]

The Exchequer Secretary to the Treasury (Mr. Phillip Oppenheim): In the financial year from 1 April 1995 to 31 March 1996, Her Majesty's Customs and Excise seized 4,374 live animals, 12,178 parts of derivatives of endangered animals species and 2,748 plants. In the first half of the current financial year, Customs and Excise has seized 20,936 live animals, 4,446 parts of derivatives and 89 plants. The dramatic increase in the live animal figure is explained by two individual seizures of 10,000 medicinal leeches.

Mr. Banks: Those are terrible figures, although the whole House will congratulate Customs and Excise on its vigilance in seizing the items. I realise, of course, that the Minister is something of an endangered species himself, but does he agree that those who trade and traffic in endangered species are among the worst criminals on earth? They are even worse than drug traffickers, because their vile trade threatens whole species. What additional resources will the Minister make available to Customs and Excise? What particular support has he given to Europewide initiatives? Is there something we can do about the appallingly low level of fine that is imposed on traffickers who say that they did not realise that what they brought in was an endangered species? Surely we must do far more.

Mr. Oppenheim: I agree with many of the sentiments that the hon. Gentleman expresses. I personally consider the illegal trade in endangered species to be particularly horrible. Its detection and stamping out are among the most crucial and important of the roles of Customs and Excise.
In response to the other part of the hon. Gentleman's question, he may say that Tory Members of Parliament with majorities such as mine are an endangered species, but so apparently is the species known as socialist red in tooth and claw, which is how he used to like to characterise himself. However, I see that his new habitat is the director's box at Stamford Bridge: perhaps he has come over all aspirational and has sold out to new Labour's mobile phoneys. Either way, we endangered species should stick together. I take his comments very seriously and I entirely agree with him.

Unemployment

Mr. Congdon: To ask the Chancellor of the Exchequer what assessment he has made of the factors, with special reference to fiscal and monetary factors, which have contributed to the United Kingdom's fall in unemployment since its peak. [4857]

The Chancellor of the Exchequer (Mr. Kenneth Clarke): Sound public finances, low inflation and low interest rates have helped unemployment to fall to its lowest rate for more than five and a half years. My Budget will ensure that it continues to fall.

Mr. Congdon: Does my right hon. and learned Friend agree that our success in reducing unemployment is in sharp contrast to the record of France and Germany? Does that not show conclusively that we would be foolish to sign up voluntarily to the social chapter, which would impose additional costs on companies, and that we should continue to resist any attempt by our European partners to impose their sorts of social costs on Britain, whether by the front door or the back door?

Mr. Clarke: I agree entirely. Even when the other continental countries achieve better rates of economic growth, their experience tends to be that that growth does not create jobs as it does in this country. That is because they are over-regulated, they have inflexible labour markets and the costs of employment are far too high. It is therefore extremely important that we should repudiate the social chapter. That sentiment is shared by large numbers of German, French, Dutch and other industrialists. It is quite extraordinary that the British Labour party continues to advocate a turn towards that approach to employment, when the business community in the rest of the continent is hoping to get away from it.

Mr. Malcolm Bruce: In view of the need to keep down unemployment and sustain that reduction, is the Chancellor prepared to contemplate an increase in interest rates, if that is recommended by the Governor of the Bank of England at their next meeting? How does he think the unemployed and those on low incomes are helped by the continuing increase in indirect taxes, given that they do not benefit from the reduction in direct taxation?

Mr. Clarke: First, interest rates sometimes go down and sometimes go up. I shall set interest rates at whatever level is necessary to achieve the inflation target, which is important to keep our present healthy recovery on a sustained course for many years to come.
On the hon. Gentleman's second point, one of the most significant changes that I have made in the Budget is to raise the thresholds for income tax, which measures have taken about 400,000 people out of tax altogether since the last election.

Mr. Evennett: Will my right hon. and learned Friend confirm that low inflation is absolutely essential for future economic prosperity and that it is only Conservative Members who believe in low inflation, because high inflation destroys jobs and destroys people's incomes?

Mr. Clarke: We believe in it, we are delivering it and the present experience of living in a low-inflation economy is the best that the British people have had for 50 years. To put that at risk now by going back to Labour Governments—who habitually and frequently had inflation rates going into double figures during their terms of office—would be a disaster for this country.

Mr. Milburn: Is not the reason why the Chancellor has put up taxes 22 times since the last general election that

he has failed to tackle the real level of unemployment, where one in five households of working age have no breadwinner? Will he confirm that his tax-raising Budget means that the typical family will pay an extra £2,120 in tax by the time of the next election?

Mr. Clarke: That is a ridiculous choice of figures to give as the background to a Budget that stimulates further the expected rise in living standards of the ordinary people of this country because the economy is doing so well and because we have returned to our tax-cutting agenda and lowered income tax. That £2,000 figure is apparently some cumulative, rolled-up calculation of the difference between tax paid and what tax would have been if it had not been indexed, and it also takes account of the fact that earnings are going up.
What is happening in this country is that more people are working, more people are unemployed—[Interruption.] If the Opposition believe that, the figures get even sillier. More people are working, fewer people are unemployed, they are earning more and their earnings are worth more. The Labour party is then astonished to find that some people are therefore paying more tax. They are paying more tax because they are better off—their earnings are higher and the average family is £100 a week better off since 1979.

Mr. Duncan Smith: Does my right hon. and learned Friend agree that it is quite ridiculous that Spain. whose natural non-wage costs should be low because of its historical position, now finds that its non-wage costs and the overall cost of employing a worker are almost as high as those of Germany, even though Spanish productivity is nowhere near as high? Does that not demonstrate that the policies that Spain followed under previous socialist governments are exactly what that lot over there would have done?

Mr. Clarke: I do not think I would upset many of my Spanish friends—I am very fond of Spain—by saying that the Spanish have one of the most inflexible and over-regulated labour markets in western Europe and they suffer for it. I believe that the rate of youth unemployment in Spain is more than 30 per cent., which is appalling. More than 30 per cent. of the Spanish work force are on short-term contracts, trying to avoid certain labour regulations that go beyond even the social chapter, which itself causes great damage to employment prospects in Spain, as it does across the rest of the continent.

Manufacturing Industry

Mr. Barry Jones: To ask the Chancellor of the Exchequer if he will make a statement about his fiscal proposals to assist United Kingdom manufacturing industry. [4858]

The Chief Secretary to the Treasury (Mr. William Waldegrave): The Government's economic policies provide the environment for a healthy and successful manufacturing sector.

Mr. Jones: Does the right hon. Gentleman accept that the strengthening pound is posing very real problems for Britain's export industry? Does he agree that, for example, British Steel, which is one of the leanest and


fittest of companies, is encountering problems in exporting? What will his Government do to tackle this growing problem?

Mr. Waldegrave: As the House knows, the Government do not maintain an exchange rate target. I agree with the hon. Gentleman that the privatised British Steel's export performance is marvellous—up by about 400 per cent. since it was denationalised—and it is a fine company. We do not maintain a target for the exchange rate and do not intend to do so.

Mr. Wilkinson: Does my right hon. Friend agree that the extremely positive measures that Her Majesty's Government have taken in the Budget—for example, reducing corporation tax for small companies to 23p in the pound, in line with the standard rate of income tax, and reforming the uniform business rate—are immensely helpful, as small companies have to expand, by virtue of their retained profits, and those retained profits should be healthier by virtue of Her Majesty's Government's measures?

Mr. Waldegrave: My hon. Friend is right that the measures in the Budget, and the climate for business maintained and supported by the Budget, are extremely good for small business. That is why the welcome given to it, in resounding terms, by the Forum for Private Business was accurate. It said that this was
The best budget in a decade for owner-managed firms.
The same is true for other small firms, which have the benefit of the action on business rates and the benefit of the lower corporation tax. My hon. Friend was entirely right in what he said.

Mr. Grocott: Can the Chief Secretary confirm that the number of jobs in manufacturing industry has fallen terrifyingly since the Conservative party came to power in 1979? Can he explain to the House whom he blames for that?

Mr. Waldegrave: What matters, surely, is manufacturing output, which fell under Labour. This country has had a remarkable turnaround in manufacturing productivity since 1979, and we have now outpaced Germany and France. That is the key figure for the future of British manufacturing industry, and it is why, for example, Britain is Europe's biggest exporter of televisions and microchips, and of other products of other industries out of which we had been driven when Labour governed this country.

Income Tax

Mr. John Marshall: To ask the Chancellor of the Exchequer what representations he has received about the 20p income tax band. [4859]

The Financial Secretary to the Treasury (Mr. Michael Jack): We listened to many representations on this and many other subjects in the run-up to the Budget.

Mr. Marshall: I thank my hon. Friend for that answer and I thank my right hon. and learned Friend for widening

the 20p income tax band so that one in four taxpayers now pay a standard rate of tax of 20p in the pound compared with the 33p in the pound that they paid in 1979. That is real progress. Would it have taken place if we had followed the spending policies of the Labour party, which is never undersold when it comes to making promises?

Mr. Jack: My hon. Friend has put his finger on a very important point, because the last Labour Government disguised their position on tax by overborrowing to the tune of another lop on the basic rate of tax. Our basic rate has come down by 10p—from 33p down to 23p—and now, for a quarter of all taxpayers, as my hon. Friend says, the 20p band is their basic rate of tax.

Mr. Olner: In spite of all the rhetoric that we have heard over the past two days, the fact is that the Tory Government have put up taxes in this Budget and they are higher than ever before. When will the Government come clean and tell the British people that the Conservatives are the tax-raising party in this country?

Mr. Jack: The hon. Gentleman is always a pleasant man in the House, so I say this to him quietly: does he not remember the 83p rate of tax or, indeed, the 33p basic rate when the Labour party was last in power? His question is another cover-up for the embarrassment that he and his right hon. and hon. Friends feel for the fact that this Budget has delivered, in rising living standards, some £370 a year extra to the average family on average earnings. That is £7 a week. That is £20 a week since the previous election and £100 a week since 1979.

Building Societies

Mr. French: To ask the Chancellor of the Exchequer what discussions he has had with building societies about the future of mutual status. [4860]

The Economic Secretary to the Treasury (Mrs. Angela Knight): Since I published the last draft of the Building Societies Bill in March, I have held frequent discussions with a great many building societies on a number of issues. I have also spoken to the Building Societies Association on several occasions.

Mr. French: Does my hon. Friend share my concern that, notwithstanding the strong representations made over the past month, some building societies that are currently converting seem determined to ride roughshod over the perfectly legitimate bonus expectations of particular categories of customer, especially second named account holders who are disabled? Does she agree that it is highly desirable for pressure to be put on such societies to change their attitude to the problem?
On a wider front, does my hon. Friend agree that those societies should be required not merely to explain why they are demutualising, but to justify the particular formula that they have chosen to adopt? Part of that should involve an independent assessment of a society's overall assets, so that the members' legitimate interests can be established.

Mrs. Knight: The Building Societies Act 1986 requires societies to provide members with all material


information, and the Building Societies Commission checks that the information sent out complies with that requirement.
As for the issue of disabled people and other groups, within certain constraints the existing Building Societies Act allows societies to devise a variety of schemes involving, for instance, making a pay-out to each member, making a pay-out for each account and making a pay-out for each name on the account through the first named members. It is for the building societies themselves to decide which scheme they feel is most appropriate—and, of course, for the members to decide.

Capital Allowances

Mr. Nicholas Winterton: To ask the Chancellor of the Exchequer if he will make a statement on capital allowances. [4861]

Mr. Jack: Our view is that the capital allowance system should be neutral so that it does not distort business decisions.

Mr. Winterton: I congratulate the Government on achieving sustainable growth with low inflation and low interest rates, but does my hon. Friend share my concern about the level of investment in industry? Although investment has increased, it has perhaps increased from an all-time low base. Does my hon. Friend agree that capital allowances are the most effective way of targeting fiscal incentives at successful companies? Will the Treasury review its current position?

Mr. Jack: I know my hon. Friend to be a passionate supporter of manufacturing industry in particular: he takes a keen interest in these matters. I believe that the best way in which to assist his cause and, indeed, that of the country is to have a successfully growing economy, and my right hon. and learned Friend the Chancellor has projected growth of 3½ per cent. in his Budget. We expect investment in industry, which has already risen by 6 per cent. this year, to rise by 10 per cent. next year. We do, of course, give capital allowances to industry, but the pay-off that they have for the current system is certainly Europe's most competitive main corporation tax regime.

Mr. Sheldon: In his Budget statement, the Chancellor of the Exchequer announced in principle that capital allowances should bear a relation to the life of the asset. That is something with which we should all agree, but it does not happen in the case of a number of high-tech projects. Will the Financial Secretary look into the position again, to ensure that every incentive is given to manufacturing industry when it invests in high-tech projects and that that relationship between the life of the asset and capital allowances is converted into some sort of reality?

Mr. Jack: The right hon. Gentleman will be aware that the Budget made no changes to the very generous tax reliefs in the context of scientific research allowances. That is particularly valuable to high-tech investment. As for long life assets, I am delighted to have the right hon. Gentleman's support.

Mr. David Shaw: Will my hon. Friend confirm that the changes to depreciation for tax purposes in respect

of long life assets are such that the utility companies will be paying about another £3 billion in tax over five years? As a consequence, they will have no money to pay for a windfall profits tax; but, more important, they will not be able to recover the adjustment in tax allowances that my hon. Friend is making from the price cap. People know that, under a Conservative Government, any extra taxes that the utility companies pay will not result in price increases, as they would under a Labour Government.

Mr. Jack: My hon. Friend is extremely astute. He is a darned sight more astute than many of the Opposition Members who have been pontificating on economic matters in the past 24 hours. His calculation rightly reflects the heavy investment to which the utilities are committed. We have made changes to bring the tax treatment of allowances on long life assets into line with accountancy practice. That affects all sections of industry.

Mr. Mike O'Brien: Will the Minister confirm that, although the Chancellor delivered the Budget with all the flair and panache of a second-hand car salesman selling a dodgy motor, what we saw when we looked under the bonnet was a tax-raising Budget? The Government have raised taxes for individuals 22 times in recent years. That has contributed to the pressure on all businesses, which has been added to by the Government's policies on capital allowances, and by the failure of their economic strategy. This is not a Government for business; they are a Government who undermine business.

Madam Speaker: Order. As far as I know, the Opposition Front-Bench spokesman did not ask a question, but I am sure that the Minister is capable of dealing with that.

Mr. Jack: I was shocked to find that the hon. Gentleman had finished. He sounds like a worn-out record. The Chancellor's Budget was good for business. The hon. Gentleman must have been asleep, or he would have heard the announcement in the Budget of measures that will address the concerns of small businesses about the uniform business rate. He would also have learnt that the economy will grow at 3½ per cent. next year, which is good for business. He would also have heard that investment in industry will rise by 10 per cent., and that our prospects for sales overseas have improved. All that and many more good things were what business wanted. The chairman of ICI welcomed the Budget, as did GKN and many business leaders.

Privatisation

Mr. Whittingdale: To ask the Chancellor of the Exchequer what assessment he has made of the effects on the public finances of the Government's privatisation programme. [4862]

Mr. Waldegrave: Total receipts from the privatisation programme from May 1979 to March 1996 were £81 billion at 1995–96 prices. That has helped the Government


to ensure that public debt as a share of gross domestic product is among the lowest in the European Union. In 1979, it was among the highest.

Mr. Whittingdale: Has my right hon. Friend seen the recent survey, which shows that, between 1980 and 1982, the nationalised industries cost the taxpayer £300 million every year, and that between 1987 and 1995 those same industries contributed £4.8 billion to the Exchequer every year, excluding privatisation receipts? Did not the Labour party oppose every single privatisation? Even now, it would destroy that success by political interference through the regulator, and by the imposition of a windfall tax.

Mr. Waldegrave: My hon. Friend is right. I have seen the tax figures to which he referred, and they certainly show that those industries make a large net contribution to the Exchequer. I should like to draw another dimension to my hon. Friend's attention. Without privatisation proceeds, and other things being equal, our debt stock would now be higher by about £100 billion. That includes extra debt interest totalling £37 billion since 1979, which is 5 per cent. of GDP. They would have been the figures if we had not privatised those industries, although the principal reasons for privatisation were the huge supply-side gains and the gains to the consumers.

Mr. Pearson: As it is impossible to identify in the Red Book the level of asset sales built into the Budget, will the Minister confirm what assets will be sold in the next financial year? Will he publish a table to make it clear, so that we can all see how the Government are selling off the country's assets?

Mr. Waldegrave: I am glad to hear that the hon. Gentleman is still in old Labour mode on privatisation—I suspect that that applies to the whole of his party. The level of asset sales in any particular year that is corning depends on achieving the proper price for those assets. It is unwise to give too much detail in advance of sales. That has always been the custom in the House.

Mr. Legg: I congratulate my right hon. and learned Friend the Chancellor on his statement in the Budget that the student loan book is to he privatised. In line with my right hon. and learned Friend's assurances to the House in his statement on Monday, will my right hon. Friend the Chief Secretary confirm that the Maastricht convergence criteria will not be fudged and that the estimated £3 billion proceeds from that sale—which is equivalent to almost 0.5 per cent. of gross domestic product—will not count towards achieving our 3 per cent. Maastricht deficit criteria?

Mr. Waldegrave: In privatising the student loan book—a sensible thing to do—it was not in our mind to achieve any particular level of anything. We are following the sensible policy of transferring risk to the private sector and getting the Government out of a business that they should not be in—ownership of a large loan business. It is sensible to do so.

Taxation

Mr. Martlew: To ask the Chancellor of the Exchequer how much tax a typical family will pay in the next financial year; and what was the figure in 1992. [4863]

Mr. Jack: A family on male average earnings should be about £370 better off next year after earnings growth, tax and inflation. This total takes the rise since 1991–92 to £1,130.

Mr. Martlew: Does the Minister realise that the rhetoric does not meet what was stated in the Budget? Is not the reality that a penny off tax has been more than cancelled out by the increase in indirect taxation? Because of the local government settlement yesterday, families in my constituency will be paying 6 per cent. more in council tax and will suffer a 6 per cent. cut in services. They will be paying more for less.

Mr. Jack: I must correct the hon. Gentleman. The penny cut in the basic rate of tax was not the only tax reduction in the Budget. My right hon. and learned Friend the Chancellor increased the starting point for tax by enlarging allowances by £280 and he also widened the 20p band. Those are important further tax changes that the hon. Gentleman did not mention.
The figure that I gave a moment ago takes into account all those factors and the growth in earnings in real terms occasioned by the economy's excellent performance—[Interruption.] It is not rhetoric; it is fact. People will be £370 a year better off under the Budget.
On the point about council tax, perhaps the hon. Gentleman should listen to what Sir Jeremy Beecham—a Labour supporter—had to say. He suggested a level of 66p a week for a band C house. The hon. Gentleman should keep things in perspective.

Mr. Brazier: Does my hon. Friend accept that many Conservative Members are very glad that so much of the Budget tax cuts are focused on the low-paid, principally through the increased allowances? Does he agree that one of the keys to reducing unemployment—and, indeed, tackling a number of other social ills—lies, rightly, in assisting those working hard on modest wages to put some clear blue water between them and their families and those who, for whatever reason, find themselves fully dependent on the state?

Mr. Jack: My hon. Friend, who shows his usual perceptiveness, has put his finger on an extremely important part of the Budget, which is to improve the work incentive. By raising the starting point for tax, we are helping people who want to get back into the labour market, but who may initially have to accept lower-paid jobs. The widening of the 20p band will also help them. That help is realistic and is targeted towards those people—unlike the barmy idea of a lop starting rate suggested by the Opposition. Where will the money for that come from? All it would do would be to help all the people who are not at the heart of my hon. Friend's question.

Mr. Darling: Does the Financial Secretary agree with the conclusion reached by his right hon. Friend the Chief


Secretary in last night's debate, when he confirmed that taxes will go up this year? Is not one reason why the Conservatives are behind in the polls that they keep breaking their promises on tax? The hon. Gentleman is increasingly aware, as is the Chancellor, that one reason why the Conservative party simply is not capable of being led is that it breaks its promises on tax and spending again and again.

Mr. Jack: I do not recall my right hon. Friend the Chief Secretary making any such admission. I remember an exchange about the tax burden, when he put the record straight and said that, as a result of this Budget, the tax burden would be the same as it was when we went into the last general election. The hon. Member for Edinburgh, Central (Mr. Darling), in putting his question, does not take into account the 25 Tory tax decreases since 1992—[Interruption.]
At least Labour Members' mirth shows that they are awake and have received the message that 25 is a bigger number than 22. They do not like the fact that, taking it all into account, the family on average earnings will be £370 better off as a result of the Budget. Those are the facts, and they do not like them.

Mr. Cash: Does my hon. Friend accept, without being a Cassandra in any way, that the reason why that lot opposite are incapable of doing anything to help families in relation to tax is that they were up to their eyes in endorsing the exchange rate mechanism, which led to the public sector borrowing requirement going up so high, which in turn led to our having to impose taxes, including value added tax on gas and fuel? They are caught by the fact that they are up to their eyes in it the whole time.

Mr. Jack: My hon. Friend underscores the fact that, whenever they have made any attempt to run Britain, Labour Members have been up to their armpits and beyond in debt. Labour is a high debt, high spending and high tax party.

Exchange Rates

Mr. MacShane: To ask the Chancellor of the Exchequer what estimate he has made of the impact of the rise of sterling since January on British exports. [4864]

Mrs. Angela Knight: The trade figures in goods released yesterday for the third quarter show that the volume of UK exports of goods, excluding oil and erratics, were up by 3 per cent. on the previous quarter, and 7½ per cent. on a year earlier. Exports have been performing well this year, despite the rise in the pound and weakness of activity in Europe.

Mr. MacShane: Does the Minister share the concern of many of our leading exporters about the continuing rise in sterling? Yes or no?

Mrs. Knight: The best thing for our exporters is to continue to be competitive and to show the sort of performance that they have shown in the past. They have been doing an excellent job, and will continue to do so. We expect exports to increase next year, not least because activity in Europe looks likely to start to improve.

Mr. Pickles: Exporters in my constituency say that what they need more than anything is a period of stability.

They want low inflation, low interest rates and to be able to invest. They have had 49 months in which inflation has been below 4 per cent. Does my hon. Friend agree that that is the most important thing for exporters?

Mrs. Knight: My hon. Friend is entirely correct because, in the past, a low exchange rate has been accompanied by high inflation, which has rapidly eaten away any trading advantage that the United Kingdom might have had. That is why concentrating on a low inflation target means that UK exporters have the stability that they need. It enables them to ride out any short-term currency fluctuations. The continuing stability in the UK has been recognised by many companies—large and small, exporters and non-exporters. We are determined to keep that stability. During the last Labour Government. this country's biggest exports were probably companies leaving Britain.

Population Estimates

Mr. Barnes: To ask the Chancellor of the Exchequer if he will arrange for (a) mid-term population estimates and (b) electoral registration figures to be produced by parliamentary constituencies as well as district council area. [4865]

Mrs. Angela Knight: Mid-year population estimates are prepared for local and health authority areas. The latest estimates were published by the Office of National Statistics in August 1996. Electoral registration figures are produced both for local government areas and for parliamentary constituencies and are placed in the House of Commons Library.

Mr. Barnes: I knew that—that is not the answer to the question I asked. I asked whether the electoral registration figures for the eligible population in parliamentary constituencies would be produced alongside the figures on parliamentary registers. If they were, we and our constituents would see that, in each constituency, on average, 5 per cent. of people are missing from electoral registers. In a year when we are moving towards a general election, it is important that we should try to put the electoral register right.

Mrs. Knight: I think that everyone is concerned that people should register to vote and that our electoral registers should be correct. The hon. Gentleman—who has a long-standing concern on this issue—is incorrect about the number of people whom he thinks are not registered to vote. I remind him that the resident population probably includes about 1 million non-Commonwealth and non-Irish citizens who are not eligible to vote. I understand that he is concerned about the fact that there are about 57 fewer people on the electoral roll in his constituency this year compared with last year; I suggest that that may have something to do with him.

Labour Statistics

Mr. Harry Greenway: To ask the Chancellor of the Exchequer if he will make a statement on the number of people currently in work. [4866]

Mr. Oppenheim: Total employment has risen by more than 200,000 people during the past year,


more than ¾million since the end of 1992, and more than 1.3 million since the end of 1979. We now have a higher proportion of our working age population in work, and a lower unemployment rate, than any other major EU country.

Mr. Greenway: Is it not a matter for congratulation that unemployment is continuing to fall so dramatically? Is that not due, at least in part, to falling taxation levels? When we speak of falling taxation levels, should not we reflect on the reduction of the top tax rate, in 1979, of 83 or even 98 per cent. and the standard rate of 33 per cent.? Those were the taxation levels under the Labour party, and they would be again if Labour ever had the chance. It is a high taxation party—and always will be.

Mr. Oppenheim: My hon. Friend is right. It is worth reminding Labour Members that, when they were in power, borrowing was twice the level it has been under this Government, and that, since we came to power, we have moved from the bottom to the top of the league in manufacturing productivity growth. That is why we have moved from almost the bottom of the European employment league to almost the top. That is good for Britain, good for exports and good for the prosperity of British people.

Mr. Foulkes: Is the Minister aware that—like the rest of us—the local Labour party in New Cumnock did not believe the unemployment figures? Therefore, some of its members knocked on every door in the town of New Cumnock, and got the real figures. More than twice as many people are unemployed as appear on the register. On the register are only those who receive benefits, and they are far fewer than the real number. The figures are bogus, and the Minister knows it.

Mr. Oppenheim: I suspected that an Opposition Member would fall into that trap, so I was very careful not to quote the claimant count but labour force survey figures. The Trades Union Congress has called those figures "wholly reliable", and the Labour party stated that it would like to base unemployment on them. They are International Labour Organisation figures, and they are totally comparable with figures quoted overseas. They have nothing whatsoever to do with the claimant count.

Mr. Budgen: Will my hon. Friend confirm that the most important factors that decide the employment level at any one time are completely outside the control of any Government? Will he also confirm that the recent rise in sterling, which had an effect on manufacturing industry, was outside the control of the Government, and unexpected by them? Is not that a very good indication of how the pound can never be constrained, either within an exchange rate mechanism or a single currency?

Mr. Oppenheim: I do not agree completely with my hon. Friend. Jobs arid the levels of manufacturing, productivity and exports can be affected by Government supply-side policies, by fiscal policies and by other policies. That is why Conservative Members should take some credit for the success of the British economy in the past 17 years. We have closed no less than three quarters of the competitiveness gap with Germany which had opened up in previous decades.

Mr. Beggs: May I congratulate the Minister or his statement and on the policies that the Government have

been pursuing, which have achieved such a drop in unemployment? May I also pay tribute to the Industrial Development Board and to Baroness Denton for their efforts and success in attracting new investment to Northern Ireland? Does the Minister agree that small companies across the United Kingdom can contribute to a further fall in unemployment by concentrating more on marketing and exporting the products that they manufacture? Will he invite the Secretary of State for Social Security to consider further the plight of those on jobseeker's allowance who may have difficulty finding employment, and who are at personal loss because they do not receive travel allowance?

Mr. Oppenheim: I agree with virtually everything that the hon. Gentleman said. One advantage of the jobseeker's allowance is that it helps to identify people who have difficulty getting employment because of illiteracy and other factors. I endorse what he said about the IDB, but however much help the IDB gave to attract inward investment—it has been very successful—it would be wasted were it not for the fact that the productivity of the British work force has increased dramatically, and faster than that of our major competitors in recent years. That is a major reason why so many companies that could go anywhere in the world are attracted to Northern Ireland and Britain.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Gallie: To ask the Prime Minister if he will list his official engagements for Thursday 28 November. [4886]

The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Gallie: Is my right hon. Friend aware of the concerted campaign by Labour-controlled authorities against compulsory competitive tendering? Is he further aware that my local authority, South Ayrshire, favours direct labour organisations against the interests of small local contracting companies that have provided excellent services at low cost for a number of years? Does he agree that the fact that my right hon. Friend the Secretary of State for Scotland highlighted that wasteful practice led to his being awarded the title of Parliamentarian of the Year?

The Prime Minister: My hon. Friend is right to draw attention to the wasteful behaviour of a large number of Labour-controlled local authorities. Before the Opposition complain about council tax levels, they should put their own house in order. If they did, they would be able to hold down council tax.

Mr. Blair: Will the Prime Minister confirm that, according to the Red Book, the overall tax burden next year will be higher than it is this year?

The Prime Minister: No, I do not confirm what the right hon. Gentleman has been saying. For some time,


the right hon. Gentleman has been desperate to cover up the fact that living standards are rising. The Opposition have produced the most spurious attacks on tax in the past few weeks. They claim that there have been 22 new taxes over the past five years, but I can identify 25 tax reductions in the past couple of years. The right hon. Gentleman takes no account of rising incomes and people moving into higher tax brackets, so he is painting a misleading picture. We have the lowest rate of basic tax for 60 years. It was 33p and it is now 23p.

Mr. Blair: The Prime Minister wants to take credit for the fact that people's earnings have increased, but they have earned that money, not the Government. Is it not curious that the Conservative party no longer wants to talk about tax? Will the Prime Minister return to the central question that I asked him? Is it or is it not right, according to his own Red Book, that the overall burden of taxation next year will be higher than it is this year? As one of his hon. Friends said, the answer can only be yes or no. Which is it?

The Prime Minister: If the right hon. Gentleman had listened to what I just said, he would have had his answer. The right hon. Gentleman does not take into account the fact that more people are working and incomes are rising. Had the Labour party presented a Budget earlier this week, taxes would have increased quite dramatically. On the one hand he accuses us of cutting expenditure and on the other hand he accuses us of putting up taxes. We have kept direct tax down and we have increased expenditure on health, the police and other important services.

Mr. Blair: Perhaps, on the third occasion, the Prime Minister will now answer the question. Because of all the taxes in the Budget—the insurance tax, the airport tax, the council tax, the fuel tax, the abolition of profit-related pay—according to his figures, the tax burden is to rise next year. It will rise not just next year but, according to the Government's plans, the year after, the year after that and the year after that, to a level higher than under the last Labour Government. Perhaps the Prime Minister will now answer the question: is it true that the tax burden is to rise next year? If it is, is not the reputation of the Tories as a low tax party now dead and buried?

The Prime Minister: The more people work, the more they earn. That is the point that the right hon. Gentleman does not seem to understand. If he thinks that taxes are too high, which ones would he cut? What support has he given us in cutting taxes? If he thinks that tax is too high, will he indicate that he will not proceed with the windfall tax, or a tartan tax, or a health tax or a teenage tax? How will he pay for the £30 billion-worth of promises that he has made? The plain fact of the matter is, however he huffs and puffs, people know that dogs bark, cats miaow and the Labour party puts up taxes.

Mr. Aitken: Is my right hon. Friend aware that the French lorry drivers dispute is now causing serious traffic chaos and economic hardship in Kent, particularly around the channel ports of Ramsgate and Dover? Now that the strike is going on, it may have a much wider impact on the country. Will my right hon. Friend make strong diplomatic representations to the French Government to extract a firm commitment that full and fair compensation

will be paid to British lorry drivers whose livelihoods have been affected by the mindless militancy of their French counterparts?

The Prime Minister: I am horrified by the consequences of the dispute for British drivers and companies. Claims for compensation must be met by the French authorities. We have made that point to them. I hope that, very soon this afternoon, the leader of the Labour party will make clear his condemnation of one of his own Members of the European Parliament, who has today described the striking French lorry drivers as "a shining beacon".

Mr. Prescott: What sort of Government is there in France?

The Prime Minister: The deputy leader of the Labour party asks what the Government in France are. What are the strikers and why are they being supported by Labour Members of the European Parliament? Will the deputy leader of the Labour party go down and talk to British lorry drivers and tell then that he thinks that the strikers are a shining example?

Mr. Prescott: It is a Tory Government in France.

The Prime Minister: The right hon. Gentleman is the strikers' friend now, as he always has been.

Mr. Ashdown: I wonder why the Prime Minister and the Government do not realise why people are so fed up with all this lying about tax. Is not the central question this: does the Prime Minister really believe that the British people are so stupid that they could be tempted to vote Conservative again because he has cut their income tax by 1p, when his own figures show that he has forced their council tax up by between £40 and £60 a year?

The Prime Minister: If the right hon. Gentleman wishes to talk about council tax, he might look at the council tax levied by local authorities under Liberal Democrat control. He might realise by how much their council taxes have gone up. He might remind the British public again that he is committed to increasing the standard rate of income tax. I hope that he will make that entirely clear. He is calling for more money to be given to Liberal Democrat councillors, who are
politically inexperienced and potentially a liability".
That is not what I think; it is what his party's internal document says about its councillors.

Mr. Hunter: Will my right hon. Friend confirm that it is not his policy to barter or bargain for the restoration of an IRA ceasefire, which should never have been broken, and that Sinn Fein's self-exclusion from the talks remains absolute, unless or until there is an unequivocal restatement of the ceasefire and the Provisionals establish over a period of time a commitment to exclusively peaceful means?

The Prime Minister: There has been a great deal of rumour and disinformation on this issue in recent weeks. The Government have had a number of exchanges with the hon. Member for Foyle (Mr. Hume)


and others about the possibility of a new IRA ceasefire. We have made it absolutely clear throughout those exchanges that IRA-Sinn Fein should give up violence once and for all and commit itself to exclusively peaceful means. We have also made it clear that we cannot and we will not change our policy to bargain for a ceasefire. In order that that should be absolutely clear, we are publishing today a statement of our policy, which we sent to the hon. Member for Foyle last weekend. A copy is being placed in the Library together with a short explanatory statement.
The talks that have been carrying on for some time are likely to break for Christmas soon and to resume later in January. When Sinn Fein could join the talks depends on its own actions—[HON. MEMBERS: "This is a statement."]

Madam Speaker: Order. Listen to the answer to the question. These are crucial issues that concern our country.

The Prime Minister: I must tell hon. Members that this a matter of great interest to people not just in Northern Ireland but everywhere.
When Sinn Fein could join the talks depends on its own actions. We need to see an unequivocal restoration of the ceasefire, we need to be able to make a credible judgment that it is lasting, and we need to know that Sinn Fein will sign up to the Mitchell principles. Those matters are in Sinn Fein's hands. We are not seeking delay; we wish to see inclusive talks involving all parties as soon as possible, but if Sinn Fein continues to exclude itself, the talks must and will go on without it.

Mr. Martlew: To ask the Prime Minister if he will list his official engagements for Thursday 28 November. [4887]

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Martlew: Does the Prime Minister sanction the Tory party campaign on "Honest John"? If so, does he agree that it is designed to deceive the public over tax? When are posters going to go up saying that the Prime Minister promised not to increase VAT, a promise that he broke; and that he promised not to increase taxation year in, year out—another promise that he broke? Is not the reality that nobody believes "Honest John"?

The Prime Minister: I am grateful to the hon. Gentleman for drawing attention to our posters that indicate that we now have lower income tax, higher living standards and lower unemployment, and that that has come about directly as a result of policies that we have followed over the past few years as the Government. I am glad that he draws attention to those advertisements. I hope that everybody will see them.

Sir Irvine Patnick: To ask the Prime Minister if he will list his official engagements for Thursday 28 November. [4888]

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Sir Irvine Patnick: I thank my right hon. Friend for his reply. Is he aware that Sheffield city councillors have

increased their council allowance by 200 per cent., that Sheffield city council spends £350 per pupil on education administration, whereas other metropolitan authorities spend only £250, and that Labour Members of Parliament get free accommodation from Sheffield city council? Is he also aware that Silverdale school in my constituency, which is in need of urgent repair, has been informed that there is no money for such repairs? Does not that show how Labour runs Sheffield city council and how it would run the country?

The Prime Minister: The more Opposition Members barracked my hon. Friend, the more it was clear that he had hit a bull's-eye by pointing out the way the Labour party behaves in local government. He mentioned Sheffield. Certainly it is one of the councils that have failed to collect millions of pounds of council tax.

Mr. Prescott: What about Westminster?

The Prime Minister: The right hon. Gentleman mentions Westminster—but he neglects to mention Southwark, Leeds, Newham, Camden, Bristol, Liverpool, Manchester, Birmingham and Lambeth, all of them Labour councils over many years or dominant Labour under no overall control. What is it they say about Labour?
New Labour in local government offers excellence and efficiency.
Those are not my words, but the words of the right hon. Member for Sedgefield (Mr. Blair).

Mr. Barnes: To ask the Prime Minister if he will list his official engagements for Thursday 28 November. [4889]

The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.

Mr. Barnes: As a matter of statistical integrity, will the Prime Minister confirm what he sought to avoid in answering my right hon. Friend the Leader of the Opposition—that page 88 of the Red Book, which deals with total taxation and national insurance contributions, shows that there is an increase year by year over the next five years in the amount that will be paid out as a percentage of gross domestic product? Will he be honest?

The Prime Minister: As I said to the right hon. Member for Sedgefield and other hon. Members earlier, that is the impact of more people working and being paid more, and of fiscal drag. Those are the facts that the hon. Gentleman does not understand. The reality is that people have more net income in their hands than they have had at any time in the past, and living standards are rising. However he tries to muffle reality, he cannot hide from that fact.

Mr. Faulds: On a point of order, Madam Speaker.

Madam Speaker: Order. Points of order come after statements and I have two statements now.

E. Coli (Scotland)

The Secretary of State for Scotland (Mr. Michael Forsyth): With permission, Madam Speaker, I wish to make a statement about the E. coli outbreak in Scotland. The first indication of the food poisoning outbreak involving E. coli 0157 came on Friday 22 November. It was identified in the Wishaw area of Scotland and, following preliminary investigations by the local authority environmental health officers, it rapidly became apparent that the most likely common source of the outbreak was a single butcher's shop in Wishaw. By 9 pm on the same evening, environmental health officers had visited the owner and the premises concerned. All the cases investigated to date have connections with food from the butcher's premises in Wishaw.
The hon. Member for Motherwell, South (Dr. Bray), in whose constituency the likely source of the outbreak is situated, has been rightly concerned about its effects, and I wrote to him last night to report to him the latest situation, following inquiries that he made to my office.
I can now report to the House that the total number of cases reported is 132, with 64 cases confirmed and 68 awaiting confirmation. I very much regret that a total of five elderly people have died, four in the Wishaw area and one in Forth valley. On behalf of the Government and the House, I wish to extend our deepest sympathies to the bereaved families. I sincerely hope that all others affected can make a full and speedy recovery.
On the basis of all the data that have been collected to date, it would appear that the epidemic peaked round about 20 to 22 November. There is still the possibility of further cases occurring up until this coming weekend. Thereafter, there is still, of course, the possibility of secondary cases occurring as a result of person-to-person spread.
When news of the outbreak was first notified to the health board—on the afternoon of Friday 22 November—local action was taken immediately to identify the source. On Saturday 23 November, the butcher agreed to cease production and distribution of cooked meat and meat products. Further investigations were carried out to establish the supply routes from the butcher's shop, and hence the further premises that might be selling contaminated produce.
The initial indications from the investigations were that the further premises were localised in the north Lanarkshire area. The full local control arrangements, involving both the local authority environmental health officers and Lanarkshire health board officers, were set in action.
On Tuesday 26 November, the local outbreak control team identified distribution of contaminated produce beyond Lanarkshire, and food poisoning cases were reported in Forth valley. Following detailed consultations late on 26 November between Scottish Office officials and the local control team about the difficulty of identifying the distribution premises outwith the local area, a food hazard warning notice was issued early on 27 November to the environmental health departments of all local authorities in Scotland, to directors of public health and to consultants in public health medicine. It sought their immediate assistance, especially the assistance of those in the Central belt, in tracing any potential infected food that may still be on the market.
Given that most cases are still within the Lanarkshire health board area, and that all the evidence points to a single primary source of the outbreak in Lanarkshire, the outbreak control team in Lanarkshire remains the main focus of activity in respect of investigation and control of the incident. All the necessary measures have been implemented, and the procedures are working well. Scottish Office officials are attending meetings of the control team and are keeping careful watch on the further spread of cases.
Any newly reported cases of E. coli 0157 occurring in Scotland will be fully investigated locally by consultants in public health medicine, to see whether any connection with the Lanarkshire incident is established. I am therefore satisfied that existing procedures are working, and that all that can be done to contain the outbreak is being done.
However, it is clear that we need to establish exactly what happened, and to take any measures necessary to minimise the possibility of a repetition of the incident. I have therefore decided to appoint an expert group to investigate the circumstances surrounding the outbreak, and to advise me on any implications for food safety and on the general lessons to be learnt.
Professor Hugh Pennington, professor of microbiology at Aberdeen Royal Hospital NHS trust, and Scotland's foremost authority on E. coli, has kindly agreed to chair the group. It will not, of course, replace or cut across the other necessary investigatory work or any legal processes that might flow from the tragic outbreak. The full terms of reference and membership will be announced shortly. The members will be selected for their expertise in epidemiology and food control procedures, and will be supported by the chief medical officer for Scotland.
In the short term, we are issuing a further priority food hazard warning to all local authorities, asking them to remind butchers and meat product manufacturers of the need to exercise the highest level of hygiene in their premises. The Scottish Federation of Meat Traders Associations has been closely following the incident, has as a matter of urgency issued guidance to all its members in Scotland, and is reissuing the Department of Health publication entitled, "Safer Cooked Meat Production Guidelines".
In addition to those immediate and practical steps, the need for scientific investigation of the organism has been recognised by the Government's Advisory Committee on the Microbiological Safety of Food, and in 1995, in response to the committee's findings, the Department of Health in England invited research proposals. Following assessment of the proposals received, 15 projects were approved for funding this year, four of them based in Scotland. Those projects take the cost of the on-going research effort to about £2.3 million.
It remains the case that routine hygiene measures, including hand-washing, keeping raw and cooked foods separate, cooking meat thoroughly and pasteurisation of milk and dairy products, will substantially reduce the risk of acquiring E. coli 0157 infection and other food-borne infections. In March this year, the chief medical officer issued to health boards and local authorities revised guidance setting out the basic principles for the investigation and control of outbreaks of food-borne disease. That guidance will be kept under careful review.
This is a serious matter and it demands a serious response. I should like to pay tribute to the efforts of North Lanarkshire's environmental health officers and the officers of Lanarkshire health board, and to national health service staff and general practitioners for the quality of care that they have given to the unfortunate victims. It is important that we should learn and apply all the lessons that we can from this incident. Professor Pennington and the chief medical officer for Scotland will report as quickly as possible, and we shall act on their findings.

Mr. George Robertson: I thank the Secretary of State for his statement and the information that he has given to the House. However, I regret the fact that, despite the normal courtesies, I saw the statement five minutes before 3.30 pm. Frankly, that is not good enough to allow us to make the sort of informed response that the House and the people outside deserve.
I am a Lanarkshire Member of Parliament and, with my colleagues, I know how worried and concerned people are in that part of Scotland about what is a public health emergency of the gravest proportions. I add my words of sympathy and condolence to those of the Secretary of State, to all those who have been bereaved, hospitalised or affected in any way by this horrible tragedy. I also wish those who are affected by it the same speedy recovery as the Secretary of State wished them.
I add my commendation to the agencies involved, for their prompt action—among them, North Lanarkshire council's environmental protection department, Lanarkshire health board and GPs across the county and more widely. I wish to single out the staff of Monklands and Law hospitals who have worked round the clock since last weekend to the point of exhaustion, tending with their usual dedication and care those struck down by E. coli 0157.
I have no wish to add in any way to existing public concern or to encourage any panic among the people whom I and my colleagues represent and care deeply about. But I hope that the Secretary of State will recognise that, in the circumstances today, some blunt questions have to be put and answered by Ministers if confidence is to return.
The outbreak was detected last Friday and, by that very evening, it was clear that the source was meat from James Barr and Son, Wishaw, which had been persuaded then to stop the sale of cooked, but not raw, meat. On Saturday, Monklands district general hospital was already preparing to deal with possibly a hundred cases. Given all that, how is it that only last night at 10 o'clock—five long days later, and with the death toll at five and rising—and only under pressure from Lanarkshire's Labour Members of Parliament, was the first list of outlets published? Why was there not an earlier publication of the list? Did the public not have a right to know where the suspected meat was going and the right to take precautions against these most virulent of bacteria?
Is not denying people the information that might prevent illness or even death showing a wilful and arrogant disregard for public health and public safety? Is it true that one of the reasons given for withholding the list of outlets was "commercial considerations"? Is it not long beyond time that the consumer interest was always put ahead of commercial considerations? Was the Scottish

Office behind the decision to withhold information about outlets, as the Minister's statement seemed to suggest that the Department was involved all along? What advice did the Department give to Lanarkshire health board and North Lanarkshire council about informing the people of the area?
Why is it that even at lunchtime today—six days on from the detection of the outbreak—a further 11 outlets were discovered and their names published? Is that the final list of all the outlets that took the meat? As it is possible that some infected meat might still be in fridges and freezers, will the Scottish Office publish local and national advertisements showing the known outlets for the meat? Given that knowledge of that bacterium is considerable, and that its incidence in Scotland is much higher than in the rest of the country, can the Secretary of State add to the information that he has given about the special research that has been commissioned into the reasons for that incidence and the reasons why that seems to be a particular problem in Scotland?
The Secretary of State told us about the applications for relevant research that were accepted, but how many were turned down? Last year, the Government's Advisory Committee on the Microbiological Safety of Food produced a report on E. coli, calling for more research and for guidelines on packaging and cooking beef. Were those recommendations put into practice and were any of the on-going special research projects turned down, terminated or cut back?
Does not this latest food safety emergency underline what folly it would be to make any further cuts in major food agencies or environmental protection departments? Does not it re-emphasise the need for a food services agency, to keep an appropriate distance between consumer and producer interests in the food industry and to increase public confidence in food safety?
As the Secretary of State rightly says, the situation is serious and demands serious responses, but is not it time that we started to learn lessons before, and not always in response to, emergencies such as the one that we now face?

Mr. Forsyth: I am grateful to the hon. Gentleman. There was no discourtesy intended in his receiving the statement five minutes beforehand: I completed it at 3.15 pm, being anxious that the House should have the latest possible information. I hope that he will understand that.
I am extremely grateful to the hon. Gentleman for the tribute that he paid to the local authority and national health service staff who have been involved in dealing with the matter. He asked me a number of specific questions. I emphasise the fact that, quite rightly, the matter has been dealt with at a local level, by the local health board and environmental health officers from the local authority.
The hon. Gentleman asked why the list of outlets was published only last night. The information was gathered locally and I understand that the initial view was that the list should not be published until it had been established that the outlets had received material from the butcher concerned. It was for those who obtained the list to decide whether to publish it, and last night they did so.
I agree that public health concerns should be foremost: although there may be a balance of interests to be struck, the public health interest should always predominate, and


I believe that that was the conclusion reached locally by those concerned. The hon. Gentleman asked whether the Scottish Office was behind the decision. No, it was not. Indeed, I was informed yesterday evening that there was some concern about making the information available, and I suggested that it should be published if possible.
The hon. Gentleman asked whether it was the final list. There have been difficulties in obtaining all the information required, partly because some of the food that was distributed was not properly labelled, which is of course contrary to the regulations. All those matters will need to be examined and may or may not form part of subsequent action by the appropriate authorities.
The hon. Gentleman asked whether the Scottish Office would publish advertisements. As I have already explained, that is a matter for the local health board, but I would certainly encourage it to do so, and my information is that it plans to do so. I agree that it is important that people who purchased food and, perhaps, put it in a freezer or elsewhere, should be aware of the outlets that are suspect. I understand that a large quantity of food has been recovered from those outlets and is now subject to examination.
On research, the chief medical officer told me earlier today that research projects were assessed very much on their merits. I believe that the hon. Gentleman has a valid point, and it is one of the matters on which I would expect Professor Pennington to report.
On whether establishing another quango might be the best way of coping with such matters, there is nothing in the information that has been made available to me to suggest that Lanarkshire health board and the North Lanarkshire local authority and its environmental health officers have done anything other than to discharge their duty under extremely difficult circumstances—which will no doubt become apparent at a later stage—with the utmost distinction.

Mr. Allan Stewart: I join my right hon. Friend and the hon. Member for Hamilton (Mr. Robertson) in expressing the deepest sympathy to the relatives of those who have died and to those who have suffered in this tragic, serious and unexpected epidemic. My right hon. Friend was right to take decisive action by setting up the expert group under Professor Pennington. It will wish to act speedily and thoroughly. In the circumstances, would it be sensible for it to consider issuing an interim report speedily and the more detailed report thereafter? Of course, that will be a matter for the group, but will my right hon. Friend assure the House that that possibility will be borne in mind?

Mr. Forsyth: My hon. Friend's suggestion is helpful. I plan to publish in full Professor Pennington's advice; I am grateful to him for agreeing to undertake this task. I expect him and his colleagues to provide advice as and when it seems appropriate and we shall act on it speedily. Whether it is necessary to publish an interim report will, as my hon. Friend said, be a matter for him. I would like to think that the report could be concluded speedily.
Other procedures will have to be followed. My noble Friend the Lord Advocate will need to consider whether a fatal incident inquiry is required and there may be other

legal proceedings. I am anxious that Professor Pennington should get on with his work in parallel with those processes, to alleviate public concern and to avoid a repetition of this disastrous and ghastly outbreak.

Mr. James Wallace: On behalf of my right hon. and hon. Friends, I echo the condolences expressed and wish a speedy recovery to those who are suffering. The Secretary of State told the House that information on outlets was provided as soon as it was compiled. That begs the question why it took so long—from last Friday, when the first incidents were reported, until last night—to trace the outlets. Does he have any information on that? He may be aware that an article in The Independent last summer said that the food science laboratory at Torry, Aberdeenshire was at the forefront of E. coli 0157 research. Can he say whether, in the changes and redistribution of staff that followed the closure of the laboratory, the research team has stayed together to continue its work or has been broken up?

Mr. Forsyth: As the hon. Gentleman knows, I was anxious to maintain that expertise in Scotland. Professor Pennington is the foremost expert in the subject and was very much involved in that. I am afraid that The Independent is not on my regular reading list and I am not familiar with the article to which the hon. Gentleman referred. I would be happy to look at it and let him have the detail on it.
On the compilation of the list, the hon. Gentleman will understand why I am reluctant to go into detail. I am not fully familiar with the background, but I have been assured that everything was done to try to get the material together. It depended on getting information from the butcher concerned.

Mr. Archy Kirkwood: That would take only 10 minutes.

Mr. Forsyth: The hon. Gentleman says that it would take 10 minutes. At the beginning, the information available may not have been as comprehensive. I understand that every effort was made to establish the information. The difficulties have been compounded by the fact that some of the food was distributed without proper labels and passed to other sources. All those things have created difficulties. Like the hon. Member for Orkney and Shetland (Mr. Wallace), I have asked some searching questions about the matter and I have been assured that all those involved have done everything possible to acquire the information as speedily and effectively as possible. I believe that that is the situation.

Dr. Jeremy Bray: I wish to add my condolences to my constituents and their families, especially the families and friends of the four who have died. I wish a speedy recovery to all those affected.
The immediate concern of everyone in Lanarkshire is that all contaminated cooked meat products should be cleared out of the food supply chain. I met the chief officers of Lanarkshire health board this morning with the public health consultant Dr. Ahmed, who has been in charge moment to moment, as well as the responsible public health officials of North Lanarkshire council and my hon. Friend the Member for Motherwell, North (Dr. Reid). A first step has been taken by publishing, after unnecessary delay,


the known retail outlets of the products of John Barr. The distribution system was informal. As the Secretary of State said, only this morning 11 more channels have come to light. There may be more still to come.
In those circumstances, steps clearly need to be taken to carry the information and advice through to people's homes. Probably the biggest store of contaminated material is now in the fridges and freezers of many people throughout the central belt of Scotland, and those people must be reached. Will the Secretary of State encourage Lanarkshire health board in the conclusion that it reached this morning, that it should publish full display advertisements in the national press, advising people of what to do, the nature of the products, and the sources from which they may have obtained them?
Is the Secretary of State aware that it is not generally understood that freezing does not make contaminated foods safe and that contaminated food that has been put into the freezer and then brought out possibly weeks later can be every bit as dangerous as that which is freshly eaten? Is the Secretary of State aware that all available information channels need to be used urgently to get home the message especially to families with children or old people? Is he aware that people in Lanarkshire will warmly welcome the appointment of Professor Hugh Pennington and the expert group to look into the matter?
There has been a major breach of food hygiene in Lanarkshire and it is important that all possible steps be taken immediately. There is an immediate need for a quick, independent quality control check of the implementation of the current measures. Is the advice getting through to the shops? Are the GPs fully informed? What is happening in homes? Both Lanarkshire health board and North Lanarkshire council would welcome a quick, independent, quality control audit of that nature. Will the Secretary of State ask Professor Pennington to carry it out?

Mr. Forsyth: The whole House has considerable sympathy for the hon. Gentleman and his constituents and I thank him for the courteous and typically concerned way in which he has gone about carrying out his duties. I agree with him about the importance of ensuring that the health board makes the information widely available. As he said, it has decided to take advertisements, and I believe that that is the right thing to do. The hon. Gentleman is right about the need to ensure that any food that may have got into freezers is traced. Proper and full cooking will destroy the E. coli bacteria in raw meat. Those who believe that they may have processed meat from one of the sources that have been identified should contact the environmental health officer in their local authority immediately.
The hon. Gentleman asked me for a specific response to the specific suggestion that there should be an immediate quality check from outside, without in any way casting doubt on the quality of the work that has been done by the responsible people in Lanarkshire. That is a sensible suggestion. Whether it should be done by Professor Pennington or through our chief medical officer is a matter on which I would want further advice, but I am happy to respond to the hon. Gentleman's request, if he feels that that would be helpful in restoring or reinforcing confidence within his constituency.

Mr. Bill Walker: My right hon. Friend will be aware that all the people of Scotland will now be

deeply concerned about the possible impact of this problem, not only in Lanarkshire but elsewhere. I received two telephone calls today—I am sure that other hon. Members have had similar calls—about serious food-related problems, such as sickness, in my constituency. I am no medical expert and I have no idea what those problems are, but I am sure that we have to avoid causing panic. We must also ensure that people are made aware of what the problem really is, and I welcome the setting up of the group under Professor Pennington. I hope that it will produce information that will be helpful in some way, both now and in the future.

Mr. Forsyth: I am grateful to my hon. Friend. He is right to say that wider concern will be felt. As I said in my statement, all the evidence so far is that the E. coli can be traced to the one butcher's shop—the difficulty has been following the line through all the tributaries. My hon. Friend can reassure his constituents. I am sure that Professor Pennington will want to consider wider measures that we can take to deal with the problem, and I assure my hon. Friend that we shall act speedily and swiftly in response.

Mrs. Helen Liddell: I associate myself with the expressions of condolence. I pay tribute to the medical and nursing staff of Monklands district general hospital in my constituency and of Law hospital in the constituency of my hon. Friend the Member for Motherwell, North (Dr. Reid).
Given that the medical staff of Monklands hospital were told on Saturday that a crisis of some significant proportions was likely to be visited upon them, why was action not taken at the time when people are most likely to consume cold meats and other meats—that is, immediately after purchase—to ensure that they did not do so? As any housewife would say, it is rather late to start warning people on Thursday not to eat foods that they might have bought on the previous Friday or Saturday.
Does the Secretary of State accept that the lackadaisical attitude displayed by the Scottish Office in alerting people to the dangers of those meats has led to further illness and perhaps to people consuming those meats even at this late stage? Does he further accept that my constituents are grievously concerned about the lack of action and about the fact that local hospital facilities are now sorely stretched, which problem could have been reduced had action been taken earlier?

Mr. Forsyth: I know that the hon. Lady is new to the House and may not be aware of the procedures, but the responsibility for a local outbreak is a matter for the environmental health officers of North Lanarkshire local authority and the local health board, and nothing about their actions could be described as lackadaisical. They seem to have carried out their duties properly and efficiently, in a way that no one in the Scottish Office would criticise.
The Scottish Office became involved—as it was required to be—only when it became apparent that the outbreak might not be confined locally, which was well after the weekend. The hon. Lady would do well to wait


until she has the facts before she starts to criticise people who have been working extremely hard to protect the welfare and health of her constituents.

Mr. Phil Gallie: Sympathy and concern, especially for those who are directly involved, must be in the mind of all who think about this problem. However, other thoughts strike us, too. One of the thoughts that strikes me is the fact that awareness of food hygiene and the proper handling of meats is essential for all those involved in the meat production process. It also strikes me that that is perhaps even more important in the light of the concerns that we have expressed in recent times about bovine spongiform encephalopathy.

Mr. Forsyth: My hon. Friend is absolutely right. People sometimes complain about regulations, but they are necessary. The clear lesson from this outbreak is that the proper handling of meat products and the proper use of utensils and storage of food is very—[Interruption.]
Madam Speaker, it is extremely difficult to speak over the voices of Opposition Members.

Madam Speaker: Order. Hon. Members should not be discussing this issue with the shadow spokesman on Scotland, but paying attention to the Secretary of State, who is attempting to answer questions.

Mr. Forsyth: I am grateful to you for your protection, Madam Speaker.
The proper handling of utensils and the proper storage of food, cooked and uncooked, is very important, and we have taken steps to try to reinforce that practice through the meat trade and through actions by the Scottish Office. It is one matter on which we shall look to the expert group to give further advice.

Mr. Robert Hughes: Although I fully accept that the closure of the Tony research laboratory will have had no effect whatever on the current outbreak, does it not serve as a warning that we should not skimp on research on bacteria such as E. coli? Quite apart from looking at food hygiene and distribution, will Professor Pennington examine the original source of E. coli, because where it comes from is just as important as where it went?

Mr. Forsyth: I agree with the hon. Gentleman. I hope that it will not embarrass him when I say that, to a degree, he and I, with the Under-Secretary of State, my hon. Friend the Member for Aberdeen, South (Mr. Robertson), made common cause in ensuring that vital research jobs and activities remained in Scotland. I think that the stand that we took is vindicated, and the quality of research carried out in Scotland benefits the whole of the United Kingdom.
The hon. Gentleman is absolutely right. We need to get to the source and also look at the procedures. The hon. Member for Hamilton (Mr. Robertson) pointed out that there was uncertainty as to when the list of names should be published. We may need to give clearer guidance about that, but I am certain that the overriding priority, even though it might mean rough justice for some firms, must

be public health, particularly when dealing with a bacterium that can have such devastating and fatal consequences.

Mr. Alex Salmond: I join in the expressions of sympathy for the bereaved and the admiration for the medical staff and others who have had to deal with the implications of this devastating bacterium.
The Secretary of State, in response to local Members of Parliament who said that commercial factors impinged on the release of information, says that the outbreak should not have happened. Can he reassure the House that commercial factors did not impinge on the release of public information?
I welcome Professor Pennington's appointment—he is a world authority on E. coli 0157, and many hon. Members have a great deal of confidence in his judgment. The Secretary of State said that the inquiry will be wide ranging. Will Professor Pennington's team be able to look at the provision of food science research in Scotland, and if the team identifies gaps in that provision, will the Secretary of State give an undertaking to act on them? Will Professor Pennington look at research provision in the animal herd, which is a natural reservoir of E. coli 0157, as many authorities think that that is the key to getting the bacterium under control? Will the Secretary of State revisit the Government's refusal only this summer of research into that? Will the recommendations of the wide-ranging review that the Secretary of State promised be taken on board by the Government, as Scotland has four times the average number of cases of E. coli in the UK and the highest incidence in Europe?

Mr. Forsyth: I am very happy to give the hon. Gentleman an undertaking that we shall act on the recommendations, and if there are particular recommendations for research in this area, I can think of no one better qualified than Professor Pennington to give advice in that respect, and we shall certainly act on it.
As for the hon. Gentleman's point about commercial considerations, it clearly would not be responsible to publish a list of names until one was certain that the list corresponded to the businesses that had received the material concerned. I do not know at what stage the list was considered reliable or the basis on which advice was given to hold back publication of the list, but it would be perfectly reasonable for people to be reluctant to provide a list that might blight particular businesses, if they were not entirely satisfied that those businesses had received the product.
It is a difficult balance, and a judgment was made by the health board to publish the list. Rather than adding to its difficulty, we should anticipate that difficulty. I believe that it acted properly and fairly, but it may well be that, with hindsight and the opportunity to look over the incident, additional guidance should be given. The health board decided, exceptionally, to publish the material, and I believe that it was right to do so. The circumstances were exceptional: there was a serious, unprecedented outbreak of a serious form of food poisoning in Scotland.

Mr. Eric Martlew: First, may I record my sympathy for those who have been affected? I am very conscious, however, that Lanarkshire is less than an hour away from Cumbria on the A74. Can the Secretary of State


assure me that the health authorities in Cumbria have been kept up to date? Were any Cumbrian outlets supplied by the butcher involved infected? Will the Secretary of State also assure me that, if there is a campaign to educate people about food hygiene, it will not be restricted to Scotland, but will include the whole of Britain?

Mr. Forsyth: I have kept my right hon. Friend the Secretary of State for Health well informed about developments. He is as keen as the hon. Gentleman and me to ensure that good practice in health and safety and the handling of food obtains throughout the United Kingdom; indeed, the guidance that has been issued was produced by the Department of Health. As for Cumbria being an hour away from Lanarkshire, I hope that the hon. Gentleman observes the speed limits when he is travelling down the A74.

Mr. Michael Connarty: Can the Secretary of State confirm that the one death in Forth valley that he mentioned occurred at Bonnybridge, in the constituency of my hon. Friend the Member for Falkirk, West (Mr. Canavan)? I was informed of that yesterday evening, and I am sure that my hon. Friend would like the concern that he expressed then to be recorded in Hansard.
In fact, there have been a number of outbreaks of food poisoning in the Forth valley area—in the Falkirk council and environmental health department area. Will the Secretary of State confirm that Falkirk's environmental health department and Forth Valley health board are taking seriously the tracing of the Barr outlets, to see whether there are any in the Forth valley area, which is in my constituency and his? Will the right hon. Gentleman assure us that he will co-ordinate any action with local Members of Parliament in the Forth valley area should outlets be traced to that area?

Mr. Forsyth: As the hon. Gentleman will have heard me say in my answer to the hon. Member for Monklands, East (Mrs. Liddell), the Scottish Office became involved when it was apparent that affected material was likely to go beyond the immediate area of Lanarkshire's health authorities and local authorities. That is the established procedure for dealing with matters such as this. I can give the hon. Gentleman an assurance. I should be happy to write to him, and to the hon. Member for Falkirk, West (Mr. Canavan), who was quoted in this morning's newspapers as expressing concern. I am happy to give that assurance, and to ensure that action is taken.
I was told at 3.15 pm this afternoon that all premises that have been identified as having received material from the butcher's shop, either directly or through a third party, have now been visited by environmental health officers. The food material has been taken away, and is being subjected to analysis. Unfortunately, at the time when I came to the House, it was not possible to obtain further information about whether the E. coli bacterium had been identified in all of the material, but I can tell the House that it has now been established that some gravy in one of the pies from the butcher's shop has been identified as containing the bacterium, which makes the link. I understand that, through our clever DNA process, the bacterium can be typed so that the source can be identified. The cases in Forth valley and Lanarkshire appear to come from the same source, which should reassure the hon. Gentleman's constituents as well as mine.

Mr. Norman Hogg: The Secretary of State has been generous in his comments about

North Lanarkshire council, and in particular the environmental health officers who traced the source of affected products so speedily. On the question of guidelines and guidance for authorities, can the right hon. Gentleman tell us whether the health board or the local authority is primarily responsible for informing the public of the sources of affected products? Is there some confusion about which authority is responsible? If he intends to issue extended guidelines, will he ensure that they clearly identify who is in the driving seat?

Mr. Forsyth: The environmental health officers are responsible for the enforcement of the regulations and the operation in the butcher's shop. When such an outbreak occurs and has wider public health considerations—as it clearly has in this circumstance—it is the health board's responsibility to deal with that. The measures that the hon. Gentleman has called for to alert people to the dangers to public health, and to the actions that they should take to avoid contamination, are matters for the health board. The health board is fully aware of that, and it has acted properly.
The health board's medical officers will work directly with the environmental health officers on the investigation of the line of route by which the bacteria may or may not have been transmitted. Environmental health officers in other local authorities will visit the premises of any other shops or outlets that are involved.

Dr. Norman A. Godman: If I heard him aright, the Secretary of State said that the local health board had placed warning advertisements in the media. Was he referring to newspaper advertisements? Given the fact that more people watch television and listen to local radio than read newspapers, if—and only if—he were approached by the local health board for funding for such advertisements to be carried by television and local radio, would he give such a request serious consideration?

Mr. Forsyth: I think that the health board is fully funded for that purpose. but if there were particular difficulties, of course I would give any request serious consideration. I do not often have an opportunity to pay tribute to the Scottish media, but I can do so now. I pay tribute to the Daily Express, the Daily Mail, The Herald, The Scotsman, The Courier—I can even bring myself to pay tribute to the Daily Record—and other broadcasting outlets, some of which have given details in the press today. Advertising will have to be paid for, and the health boards have funds for that purpose. If particular difficulties arise, I shall consider them.

Mr. Thomas McAvoy: I associate myself with the expressions of sympathy offered to the bereaved. I represent a large part of Lanarkshire, so I have an interest in the matter.
The Secretary of State fairly and rightly praised the performance of official bodies in response to this emergency, including the environmental health officers employed by local authorities. Does he accept that if he does not cease his war of attrition on local authorities, whose grants he has cut, he will damage their capacity to respond to such emergencies?

Mr. Forsyth: I am not aware of having cut the grant of any local authority. We increased local authority provision last year. The announcement that was made after the


Chancellor's Budget provides for an increase on the published figures that we said would be the budgets for local authorities this year.

The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch): An increase of £45 million.

Mr. Forsyth: My hon. Friend reminds me that the figure is £45 million. I know that the hon. Member for Glasgow, Rutherglen (Mr. McAvoy) will be concerned about the overall position. We have given a commitment to increase in real terms every year the expenditure of local health boards and the health service in Scotland. The hon. Gentleman has not yet been able to persuade his Front-Bench colleagues to make that commitment, but I look forward to his support when we try to enjoin them to do so.
To make that commitment, I must determine priorities, which means that local authorities must make the reductions in unnecessary expenditure and bureaucracy that, I am sad to say, Labour Members now accuse the health service of making.

Mr. Nigel Griffiths: Will the Secretary of State change the procedures today? We do not accept his explanation that, under present procedures, he has to leave the matter to hard-pressed local agencies, which are already trying to combat an outbreak that has reached crisis proportions. Should not the Scottish Office and Scottish Ministers, as soon as they know which outlets are involved in any outbreak, take responsibility for ensuring that the public also receive that information immediately? They should not leave it to the local agencies that are under too much pressure to make statements themselves, because that would mean days lost before the public received any warning. We do not want unnecessary delays.

Mr. Forsyth: I believe in devolution—devolution of power down to local agencies. North Lanarkshire council is best able to judge the circumstances in north Lanarkshire, not the Scottish Office in Edinburgh. Lanarkshire health authority is perfectly capable of discharging the duties placed upon it by Parliament. Where those bodies require the help and support of the Scottish Office, they will get it.
It is an odd circumstance that I should be at this Dispatch Box defending the conduct of a Labour-controlled local authority, while the hon. Gentleman suggests that it needs my help and support to carry out its duties. It has carried out its duties extremely well and it can hold its head high.
Regarding the position of the Scottish Office, when there are wider consequences of an outbreak—as occurred and became apparent later in the week—it will be involved. However, the suggestion that, in some way, the environmental health officers delayed in carrying out their duties is not founded on fact, but I am willing to await the outcome of the investigation by the expert group before making a judgment. I suggest that the hon. Gentleman shows the same patience.

Mr. Adam Ingram: As a Lanarkshire Member, I have listened carefully to what the Secretary

of State has said. In some of his answers, it became clear that he was trying to absolve himself of partial blame in the matter. Will he confirm that the food hazard warning was not issued until 27 November, five days after the incident had been identified as a major problem, and that his officials were working with the local control team? I must ask him when he first became involved. What was he doing on a day-by-day basis? Why did he not act much earlier on such a major problem?

Mr. Forsyth: I think that I have already answered all those questions, but I am happy to do so again. On the publication of the list, I was informed about the situation at 7 o'clock last night. On the overall position, it is true that the hon. Member for Motherwell, South, in whose constituency the outbreak occurred, contacted my office and I wrote to him outlining all the action that was being taken.
The hon. Gentleman criticised apparent delays, but all the information that I have been given shows that those involved acted as speedily as possible. On the question of blame, he might think about paying some respect to the officials in the local authority, the Scottish Office and the CMO, who have worked extremely hard to allay public fears and to carry the matter forward. Not every issue should be turned into a reason for political point scoring across the Floor of the House.

Mr. Paul Flynn: I thank the Secretary of State for the quality of the very full replies that he has given to me over the past six weeks about the effects of bacteria. His replies were far superior to those that I received from the Secretaries of State for the other countries. Nevertheless, those replies present an alarming picture. Sadly, bacteria are becoming increasingly resistant to antibiotics. We do not know how many deaths are occurring because of that, but we know that the number of patients affected by the hospital bug methicillin-resistant staphylococcus aureus has increased by 800 per cent. during the past four years. Tragically, one of the victims was the wife of Lord Fitt, who has described the details of her death in very moving terms.
The point made by my hon. Friend the Member for Hamilton (Mr. Robertson) is that we should be wise before the event. Is there a case for examining the increasingly resistant strains of bacteria that result in, for example, tuberculosis, meningitis and many other common diseases?

Mr. Forsyth: I know that the hon. Gentleman has made a careful study of those matters, which are of great interest to him. I should be happy to draw his remarks to the attention of Professor Pennington and of our chief medical officer in Scotland and, in the light of the hon. Gentleman's comments, to ask for further advice. I cannot respond more directly than that because I have to confess that I do not have the same knowledge as him in the matter.

Mr. George Robertson: May I ask a couple of brief questions that arise from the exchanges? First, the Secretary of State was at the Dispatch Box for 45 minutes before he volunteered the information that E. coli bacteria might have been in the gravy in a pie. Why did it take so long for that critical information to be given?
Secondly, the Secretary of State tried keenly to avoid any connection between his Department and the decision to delay publication of the outlets that might have had the contaminated product, but even his statement says:
Following detailed consultations late on 26 November"—
Tuesday this week—
between Scottish Office officials and the local control team
certain decisions were made about the food hazard warning. That was 24 hours before the announcement of the full list of outlets and the critically important information. I am aware that responsibility may lie at local level, but why was his Department involved at that stage and what advice was it giving?

Mr. Forsyth: As to the point about the gravy in the pie and why it was not in the statement, the chief medical officer informed me about that just after 3 o'clock and I informed the House of it because I was asked a specific question about it. At the beginning of the statement, the hon. Gentleman was complaining that he had not had the information—[Interruption. The hon. Gentleman is asking me a question and I am trying to answer it—[Interruption.]

Madam Speaker: Order. I have had enough of seated interventions.

Mr. Forsyth: The comments of a Front Bencher on this matter should not create excitement on the Bench behind.
The chief medical officer has told me that the first tests have shown that E. coli bacteria might have been in the gravy in the pie. I made the point in the context of the fact that the food that had been collected from the other outlets had not yet been tested, so we are not in a position to say whether the E. coli could be identified.
On why the Scottish Office was involved, I explained that earlier. It became involved when it became apparent that the outbreak went beyond the boundaries of the local authority and of the health board concerned. It is true that the chief medical officer said that the information would not be published. That was on the advice of the local authority, which had gathered the information and knew the circumstances surrounding it. I have explained the sort of consideration that would apply in deciding whether to publish it and I have said that we might need to consider that matter with a view to future guidance.
I have spent quite a lot of time talking to the people involved. Nothing that I have heard suggests to me that those involved in dealing with the epidemic have done anything other than act as speedily and as effectively as possible, and with the full public interest at the forefront of their minds. We must now get on and ensure that the necessary processes are completed. The inquiry will be conducted by Professor Pennington. We shall publish his report. If there have been shortcomings, they will be there for all to see, and the House will have an opportunity to discuss the matter and to consider the facts in the cool light of day.

Business of the House

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): With permission, Madam Speaker, I would like to make a statement about the business for next week:
MONDAY 2 DECEMBER—Continuation of the Budget debate.
TUESDAY 3 DECEMBER—Conclusion of the debate on the Budget statement.
WEDNESDAY 4 DECEMBER—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Remaining stages of the Firearms (Amendment) Bill.
THURSDAY 5 DECEMBER—Motion on the Animals (Scientific Procedures) Act (Fees) (No.1) Order.
Motion on the Port of Tyne Authority (Transfer of Undertaking) Order.
Motion relating to the Social Security (Disability Living Allowance and Claims and Payments) (Amendment) Regulations.
FRIDAY 6 DECEMBER—Debate on trade and inward investment on a motion for the Adjournment of the House.
Madam Speaker, the House will also wish to know that, on Wednesday 4 December, there will be a debate on air carrier liability in European Standing Committee A, and a debate on protection against third country legislation in European Standing Committee B. As usual, details of the relevant documents will be given in the Official Report.
The business for the following week will be as follows:
MONDAY 9 DECEMBER—Second Reading of the Northern Ireland Arms Decommissioning Bill.
I am not yet able to be precise about the following three days, but I should make it quite clear to the House that I intend to make provision for a two-day debate on European affairs in advance of the European Council in Dublin on a motion for the Adjournment. The House would also like to know that I expect that both my right hon. and learned Friends the Chancellor of the Exchequer and the Foreign Secretary will take part in that debate. On Friday 13 December, the House will consider private Member's Bills.
The House will also wish to know that, in that week, it will be proposed that, on Wednesday 11 December, there should be a debate on Community railway policy in European Standing Committee A, and a debate on development of the social dialogue in European Standing Committee B.
Details of the relevant documents will be given in the Official Report.
[Wednesday 4 December:
European Standing Committee A—Relevant European Community Document: 5231/96, Air Carrier Liability. Relevant European Legislation Committee Report: HC 36-ii (1996–97).
European Standing Committee B—Relevant European Community Document: 9573/96, Protection against Third Country Legislation. Relevant European Legislation Committee Report: HC 51-xxix (1995–96).
Wednesday 11 December:
European Standing Committee A—Relevant European Community Documents: (a) 10003/95, Community Railway Policy; (b) 9654/96, The Community's Railways. Relevant European Legislation Committee Reports: (a) HC 51-i (1995–96); (b) HC 51-xxix (1995–96).
European Standing Committee B—Relevant European Community Document: 10305/95, Development of the Social Dialogue. Relevant European Legislation Committee Report: HC 36-ii (1996–97).]

Mr. Jeff Rooker: I thank the Leader of the House for that statement. On his proposal for a two-day debate on a motion for the Adjournment in advance of the European Council, how does he propose to dispose of the recent difficulties that have arisen after the reports from the Select Committee on European Legislation and the impasse on legislation in Standing Committee B? Although there is a technical reason to have a debate on a motion for the Adjournment, the House will only look stupid to the public if there appears to be an issue that we are not facing up to. That matter must be dealt with.
Although we accept—everyone does—that the channel tunnel is a private company and a private operation, ultimately the British and French public expect their Governments and Parliaments to look after safety. As the story appears to change daily, will the Leader arrange for the Secretary of State for Transport to make a statement to the House about agreed security arrangements before passengers start using the one remaining tunnel?
On a related matter, the 3 o'clock tapes said that the French blockade of British lorries would be ending so that lorries could be blocked again over the weekend. We appreciate the limitations on the Government in this situation, which have been made clear in two answers from Ministers at the Dispatch Box this week. Nevertheless, the continuing threat to the livelihoods of hundreds of British drivers is outrageous. The matter is not a "shining beacon" to anyone, irrespective of what has been said. The conduct of industrial relations in France is disgraceful, and it is putting at risk hundreds—if not thousands—of British jobs.
If the matter is not settled by the weekend, it would behove the Leader to arrange for a statement to be made in the House. It is all very well sending diplomatic notes to other Governments, but the situation cannot be allowed to continue. As an aside, one might say that the millionaire grocer Sir James Goldsmith, who has made a lot of money out of food, could use his role as a French Member of the European Parliament to help get the British lorry drivers back home.
I should also like to ask the Leader of the House to arrange at an early date a debate on the operation of Oftel and the apparent sheer waste in constantly changing the telephone number system for business and commerce. The proposed change is almost like decimalisation gone mad, and it will cost business a fortune.
Finally, will the Leader of the House tell us whether there has been any progress on the inquiry into the Budget leak?

Mr. Newton: I shall take those questions in their natural order. I cannot add much to what I said in my

statement about the two-day debate. For some years it has been customary to have pre-Council debates on a motion for the Adjournment. Further action is needed to complete the process of scrutiny, and we shall be reviewing the situation after considering what happens at ECOFIN, early next week.
On the channel tunnel, I shall of course draw the attention of my right hon. Friend the Secretary of State for Transport to the hon. Gentleman's request. However, a number of substantial investigations are under way, so my right hon. Friend cannot be accused of having neglected his responsibility. Nevertheless, the hon. Gentleman has made a point and I shall draw it to my right hon. Friend's attention.
On the blockade, the hon. Gentleman will have heard what my right hon. Friend the Prime Minister said about an hour and a quarter ago. The British Government attach considerable importance to the matter and, acknowledging that ultimately it is a matter for the French, not the British authorities, they will do anything they can to assist in bringing the matter to an end and protecting the position of British lorry drivers. However, I was slightly surprised that the hon. Gentleman should have referred to Members of the European Parliament without mentioning the Labour MEP who, as my right hon. Friend the Prime Minister said earlier, is reported to have described the French lorry drivers as a shining example.

Mr. Rooker: It was "a shining beacon".

Mr. Newton: At any rate, the hon. Gentleman might have made some reference to that. I am trying to keep the temperature down, not raise it, so I shall not pursue that matter further.
No decisions have yet been taken about Oftel. The responses to Oftel's August consultation are publicly available and are the basis of press comment. Clearly, discussion on those matters will continue.
Lastly, on the Budget leak, I am certainly not in a position to report any progress to the House.

Mr. Bill Walker: My right hon. Friend will be aware that many of us are pleased to have advance notice of a two-day debate on European affairs. I trust that my right hon. Friend will confirm that there will he an opportunity for my right hon. and learned Friend the Chancellor or my right hon. Friend the Prime Minister to define the copper-bottomed guarantees that were mentioned earlier this week so that we can judge for ourselves how safe the pound will be.

Mr. Newton: I am grateful to my hon. Friend for that question. Apart from the statement by my right hon. and learned Friend the Chancellor earlier this week, I made it absolutely clear that my right hon. and learned Friend would take part in the two-day debate to which I referred. I am sure that he will wish to report on anything that happens at the ECOFIN meeting in that respect or any other.

Mr. Archy Kirkwood: The Leader of the House will know that yesterday the Government published their long-awaited guidelines on Oftel's powers of control over the gateway box governing the future of digital broadcasting in Britain. Is he aware


that there is a great deal of concern within the industry that the powers given to Oftel are not nearly strong enough to prevent Rupert Murdoch and BSkyB from blocking open and fair competition in the supply of digital services and television? May we have an early debate to explore some of those important problems?

Mr. Newton: As I have a relative working in a relevant industry, I am well aware of the variety of views in both directions. Some people say that we are going too far and others say that we are not going far enough. The Government's view is that we have struck the right balance, but we shall continue to consider the comments that people make.

Mr. John Wilkinson: While welcoming my right hon. Friend's announcement of a two-day debate on Europe and noting his interesting statement that he will review scrutiny in the light of the European Community's Finance Ministers meeting, may I ask whether he accepts that scrutiny should take place in advance of that meeting? As the matters discussed in Committee are within the competence of the legislature—this Parliament—in as much as they concern European directives and regulations that could be incorporated into British law and are not a matter for the royal prerogative, they are not for Government action alone. Will my right hon. Friend discuss with the Procedure Committee ways in which the views of the House can be made the basis on which Ministers act at ministerial councils of the European Union.

Mr. Newton: I have no doubt that my right hon. Friend the Chairman of the Procedure Committee will read my hon. Friend's remarks with interest. It is difficult to be sure what my hon. Friend was asking for. We have established arrangements for scrutiny precisely because of some of the points that he made. That is why the discussion took place in the Standing Committee last week. There is a further requirement to bring the necessary resolution before the House. I said simply that we shall make decisions about that in the light of what happens at ECOFIN this week.

Mr. Denzil Davies: The Leader of the House will appreciate that binding agreements may be reached at the Dublin summit, especially on the stability pact. Will he give an assurance, notwithstanding the two-day debate on the Adjournment, that if such binding agreements are reached, the stability pact and the terms of the agreements will be debated on the Floor of the House so that we can vote specifically for or against them?

Mr. Newton: I have said what I believe to be the sensible course. I have announced in good faith what a lot of people wanted—a two-day debate with the Chancellor taking part as well as the Foreign Secretary. I have said that we shall need further to consider other matters in the light of what happens at ECOFIN on Monday. I cannot be expected to go beyond that this afternoon.

Mr. David Shaw: Will my right hon. Friend consider changing the business for next week? My constituency has virtually become a lorry park. There must be some action in Britain to support our lorry drivers and the haulage companies that are suffering. We must

also try to sort out what we can with the French. Last time they promised to pay compensation and did not pay up. This time they are talking about it but will probably try to get out of paying up again. Should we not be taking action in Europe and should we not condemn any Labour Member of the European Parliament who has the gall to suggest that this is a shining example of trade unionism in action? Such statements are upsetting my constituents. My office telephone has been very busy with complaints about that Labour MEP's statement. Can we not have a debate about this important matter, which is upsetting my constituents?

Mr. Newton: I have already made some observations on one of those points and come close to enraging the hon. Member for Birmingham, Perry Barr (Mr. Rooker), so I shall not venture further down that path. I have every sympathy with my hon. Friend, and even more with those in his constituency who are experiencing the difficulties that he describes. We shall do anything that we can as a Government in the circumstances that I have already referred to and, more importantly, that my right hon. Friend the Prime Minister referred to. However, it must be acknowledged that the main responsibility for this matter rests with the French authorities, not the British authorities.

Mr. Peter Shore: A two-day debate on the Adjournment is not very satisfactory. I hope that the Leader of the House will give serious consideration to having two separate, one-day debates—one on the Adjournment, to deal with the regular six-monthly report and other documents, and a separate debate, with an amendable motion, on the crucial and highly controversial subject of the stability pact and the single currency.

Mr. Newton: I cannot add much, even for the right hon. Gentleman, to what I have already said. All those issues are expected, as matters stand, to be part of the discussion at the Dublin Council. I have therefore thought it right to provide for a longer than usual debate in advance of that Council. I doubt whether splitting the issue into bits is sensible.

Mr. Jacques Arnold: May we have a debate next week on the possibility of unfair pressure on civil servants, particularly in the run-up to the general election? In particular, we should consider the threat made during an Adjournment debate yesterday to the director of the Benefits Agency in Wales. The hon. Member for Neath (Mr. Hain), a Labour Front-Bench spokesman, reminded the director of the Benefits Agency in Wales
that there is likely to be a change of Government at the next general and he must be careful that he does not become one of the Benefits Agency customers".—[Official Report, 27 November 1996; Vol. 286, c. 281.]
Is not that a threat and should not the matter be debated in the House?

Mr. Newton: That quotation, which appears to be a straightforward threat, raises a number of questions. Although I shall not seek a comment from them, I hope that those on the Opposition Front Bench will reflect on whether that is an appropriate way for Labour Members to speak.

Rev. Martin Smyth: I welcome the announcement that the Second Reading of the Northern


Ireland Arms Decommissioning Bill will take place on 9 December. Is it possible, if it is within the Government's remit, to have lodged in the Library with the Government papers the letter from the hon. Member for Foyle (Mr. Hume), together with the reply? Can the Leader of the House persuade the hon. Member for Foyle to lodge it himself, so that we might have a proper background for the debate?

Mr. Newton: I am not sure how much power of persuasion I would have—I say this entirely neutrally—with the hon. Member for Foyle. That is clearly a matter for him. He will no doubt note the hon. Gentleman's comments, as, I am sure, will my right hon. and learned Friend the Secretary of State for Northern Ireland.

Mrs. Gwyneth Dunwoody: In view of the comments of the Leader of the House about civil servants, I am sure that he will be happy to note that the ministerial reply to a planted question that appeared at 3.30 today threatened many civil servants in the traffic offices in Cardiff and Manchester with the loss of their jobs, as well as moves about the country. He has made it clear that temporary arrangements will be made to cover the Welsh traffic office. The closure of the two offices is to go ahead irrespective of the needs of the road haulage industry or of those who need protection from the cowboys in that industry. Will the Leader of the House provide time in the coming week for a debate on the Floor of the House on the fact that the taxpayer will have to pay more than £80,000 to the landlords of the area traffic office in Manchester as a result of the move to Leeds? When that office moves, there will be two area traffic offices, one on one floor, the other on the second. Anyone applying for different regions will have to write separate cheques to separate offices in the same place to pay for the same service. That will not be convenient for those of my constituents who need that help.

Mr. Newton: I know that my right hon. Friend the Secretary of State for Transport considered the position carefully before making his proposals, but I shall, of course, bring the hon. Lady's remarks to his attention.

Mr. Dennis Skinner: Why does the Leader of the House not resolve the problem about the two-day debate? I sense that, somehow or other, the Government will get themselves into another mess—although I am not against that.
The stability pact was not scrutinised. A row took place in the Commons and pro and anti-marketeers said that they wanted a debate. The Leader of the House has now said that we are to have a debate. The Chancellor of the Exchequer said last Monday that he would go to the meeting on Monday and do nothing. He is going to reserve his position—he talked about parliamentary scrutiny, reserve or whatever it is called. So nothing will change.
Then the Leader of the House says that he cannot be sure about the form of words and we shall have to have an Adjournment debate, but we could have a motion; it depends on what happens. Unless he told us something that he is not going to do, we know that nothing will change, because the Chancellor has said so.
If the Leader of the House wants to resolve the matter, he should make some arrangements with our Front Bench for a form of words for a motion. Otherwise there will be another almighty row. He should give those of us on both sides of the House who do not want to go any further towards a stability pact the chance to vote on it at the appropriate time.

Mr. Newton: As must by now be clear, I think that I have been entirely reasonable. I wish that I had succeeded in eliciting a more reasonable response from the hon. Member for Bolsover (Mr. Skinner). I should like to see him trying to agree a form of words with his Front Bench.

Mr. Harry Barnes: The resolution supported by the Select Committee on European Legislation is still on the Order Paper as No. 34 of the Remaining Orders of the Day, under the heading, "Economic and Monetary Union". It deals with the matter raised by my hon. Friend the Member for Bolsover (Mr. Skinner). Would it not be sensible to give the opportunity of at least a vote on the matter, to be taken forthwith, with an amendment then being moved, along the lines of the wording of the resolution, and supported by the Select Committee? The process of scrutiny would then have been discharged in the House before the ECOFIN meeting. The situation is peculiar, with a scrutiny reserve on negotiations that are crucial for the future development of the House.

Mr. Newton: I am not quite sure what the hon. Gentleman has in mind when he refers to something happening in advance of ECOFIN, bearing in mind the fact that today is Thursday and the ECOFIN meeting is on Monday.

Mr. David Winnick: Does the Leader of the House recall that I raised last week the case of my constituent, Raghbir Singh, who has been held in prison for 18 months without any charges and who continues to be imprisoned despite a ruling by the European Court of Human Rights on a similar case that a person who was held for five years should be released, and has subsequently been released? Why does my constituent continue to be in prison? Why does not the Home Secretary make a statement as quickly as possible? Is the Leader of the House aware that I continue to ring the Home Secretary's private office to find out what is happening? Is there any way in which the Leader of the House can help?

Mr. Newton: Perhaps I can draw the hon. Gentleman's attention to the fact that my right hon. and learned Friend the Home Secretary is due to answer questions on Thursday. With the hon. Gentleman's usual assiduousness, I would imagine that he will want to be present then to put that question directly. I shall bring the matter to my right hon. and learned Friend's attention.

Mr. Paul Flynn: Is not it time for a debate on electoral reform? Should we not plug the loophole that allows unlimited sums of money to be spent on the coming general election, as long as it is called "national spending"? Does the Leader of the House recall it being said in a debate in 1991 that it was possible for a foreign billionaire, however malign his intentions,


to come to this country and spend unlimited millions to subvert the result of a British general election? Those words have come true. Unless we plug that loophole, vote buying, which was banished from British politics in the last century, will be back. Why on earth do not the Government plug the loophole now and support my Bill, which will come before the House on 17 January? They can move in their own self-interest and at the same time protect the integrity of the British electoral system.

Mr. Newton: Would the hon. Gentleman's Bill extend to the kind of trade union advertising that can be seen in the newspapers at the moment?

Mr. Greville Janner: May we have a debate on the sad and shameful decision of the Swiss Council of States to water down the decree that was unanimously passed by its National Council to ascertain the truth about Nazi gold in that country? Is the Leader of the House aware that that is contrary to assurances that were given to the right hon. Member for Wirral, West (Mr. Hunt) and myself by the distinguished Swiss Foreign Minister, Flavio Cotti, only last week and by other parliamentarians of both major parties in both their houses? As the vast majority of Swiss people—certainly those of this generation—want to discover the truth and do justice to the victims of Nazism even at this very late date, and as I am sure we would all want the good name of that great country restored, may we have a chance to explain in the House our unanimous concern about the matter and our hope that the decision of the upper house will yet be overruled?

Mr. Newton: I was aware of the visit to Switzerland that the hon. and learned Gentleman paid with my right hon. Friend the Member for Wirral, West (Mr. Hunt), and of the concerns that the hon. and learned Gentleman wishes to express. He will understand that the right course for me to take is to bring his remarks to the attention of my right hon. and learned Friend the Foreign Secretary.

Mr. John Marshall: May I echo the plea of the hon. and learned Member for Leicester, West (Mr. Janner) for a debate on the Swiss banking system? It is quite wrong that it should squirrel away assets that belong to other people and use its secrecy as a means of depriving the victims of the holocaust of money that is truly theirs.

Mr. Newton: I will ensure that my right hon. and learned Friend the Foreign Secretary has his attention drawn also to my hon. Friend's remarks, as a clear indication that there is concern on both sides of the House about the matter.

Points of Order

Mr. David Winnick: On a point of order, Madam Speaker. The two 15-minute slots a week in which we can ask the Prime Minister questions are rather important to the House, and despite various criticisms—sometimes rather ill-informed—from outside, it is the House's wish that those two slots should remain. We understand the time that is taken by the Prime Minister and my right hon. Friend the Leader of the Opposition in asking and replying to questions, but it is unfortunate that the slot should be used to make a statement. I wish to draw your attention to the fact that the Prime Minister spent a great deal of time today answering a question from the hon. Member for Basingstoke (Mr. Hunter). His answer seemed like a substitute for a statement.
After all, only 10 questions are in the frame, and it is very rare nowadays to get beyond the fourth or fifth. I forget the last time that I was in the frame or you called me for Prime Minister's Question Time, which is, of course, the lot for many hon. Members. Can we try, as far as possible, to give opportunities to Back Benchers in those 15-minute slots? It would certainly be much appreciated.

Madam Speaker: I think that I appreciate the feeling of the House on this issue. I quite understand that that period is for Back Benchers. I thought that what the Prime Minister had to say to the House today was important to the country and should be placed on the record. For the House's information, let me say that although there is only 15 minutes, six Back Benchers were called, three questions came from the Leader of the Opposition and one question came from the leader of the Liberal Democrats. With answers from the Prime Minister, that was not bad at all. I would like to see more, but I think that it was quite a good score today.

Mr. Jacques Arnold: Further to that point of order, Madam Speaker. My question to the Prime Minister was also on the Order Paper today, and I share the hon. Gentleman's disappointment, but is not a large part of the problem the fact that every week—Tuesday and Thursday—the Leader of the Opposition makes three long statements during Prime Minister's Question Time?

Madam Speaker: Some of the problem, quite frankly, is that Back Benchers on both sides of the House ask questions that are far too long. I sit here and listen to questions that are inordinately long; they really should be Adjournment debates.

Mr. Paul Flynn: Further to that point of order, Madam Speaker. Of course, I accept what you say on this matter, but may I point out that my questions appeared on the Order Paper today and last Thursday, although they were unlikely to be called? Our best chance as Back Benchers of being able to ask questions comes from the shuffle. On the rare days that it turns out in our favour, we find ourselves in a position like today, when question 2 was not reached until four minutes before the end of Question Time. What happened today was definitely an abuse. Given the way in which the answer


was supplied, it was clear that a statement—of great importance—had been prepared, which denied us as Back Benchers the opportunity of asking the Prime Minister questions. The belief that what occurred today was an abuse and a denial of Back Benchers' rights is widely held on both sides of the House.

Mr. David Shaw: Further to that point of order, Madam Speaker—

Madam Speaker: There are no further points of order—I am taking none at all. Some Departments of State do not get much further than 10 or 11 substantive questions in something like 30 or 45 minutes. Six supplementary questions from Back Benchers and four from Front Benchers—10 questions to the Prime Minister—in 15 minutes is not a bad score at all.

Mr. Shaw: rose—

Madam Speaker: I am taking no more points of order, so sit down. I have taken on board the flavour of the House.

Orders of the Day — WAYS AND MEANS

Order read for resuming adjourned debate on Question [26 November].

Orders of the Day — AMENDMENT OF THE LAW

Motion made, and Question proposed,
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for varying any rate at which that tax is at any time chargeable; or
(d) for any relief, other than a relief which—

(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.—[Mr. Kenneth Clarke]

Question again proposed.

Budget Resolutions and Economic Situation

[Relevant document: European Community Document No. 9002/96, concerning the Council Recommendation to the United Kingdom with a view to bringing an end to the situation of an excessive government deficit in the United Kingdom, prepared in accordance with Article 104c(7) of the Treaty establishing the European Community.]

The Secretary of State for Social Security (Mr. Peter Lilley): Given the enormous size of the social security budget, which accounts for nearly a third of total expenditure and more than 40 per cent. of central Government spending, it is right that we should devote a day of the Budget debate to that subject and I welcome the new format this year. Throughout the 50 years since the welfare state was established, spending on social security has grown at a rate of 5 per cent. a year compound, or almost twice as fast as the economy. It has taken an ever rising share of national income and it has been the main cause of rising taxes and increasing burdens on business and employment. Indeed, the cost of welfare has risen to a level at which it contributes to the burdens on business, destroying jobs and putting people on to welfare. From being the cure, it has become through its cost part of the cause of unemployment. But as the result of the reforms in this and previous Budgets, we have turned that position round.
Social security is now set to take a declining share of national income, leaving scope for reducing taxes and burdens on employers, creating a more dynamic economy, generating more jobs, and getting people off welfare and into work. That is a tremendous achievement and the major contribution to that achievement has been our success in getting people off welfare and into work. Unemployment is down by nearly 1 million from its peak. It is now lower than in any major European country and it is falling. There are now 750,000 more people in jobs than four years ago. A higher proportion of our adult population is in work than in any other major European country, and the figure is rising. That success is the direct consequence of our welfare-to-work measures and our economic reforms.
But there are still upward pressures on my budget including, above all, the result of more people happily living longer than expected and more generous benefits for disabled people. I have to tell the hon. Member for Peckham (Ms Harman), the Labour party's spokesman for social security, that when she describes the continued growth in social security spending—as she did the other day—as
the result of social and economic failure",
she is in effect insulting millions of elderly and disabled people, whose only fault is to live longer than expected. We count their long lives a success and we count our record, in giving four times as much help to sick and disabled people as Labour ever did, as a source of pride.

Mr. John Garrett: Never mind the elderly and the disabled. What about the fact that since 1979 the number of children living in poverty—as defined

by international standards—has risen from 920,000 to 2.9 million? What does the Secretary of State think of that?

Mr. Lilley: The hon. Gentleman may not mind the elderly and disabled, but I do and I think that it is monstrous to describe increased spending on them as the result of social and economic failure. As for children living in poverty, the hon. Gentleman knows that the biggest single contribution to that is the breakdown of family life, which is an issue to which I shall return later in my remarks.
As I told the House on Monday, if we are to maintain a decent level of provision for those in genuine need—as the Government are determined to do—we must maintain the momentum of our reforms, and that is what my right hon. and learned Friend the Chancellor's Budget statement does. I shall not go through the figures in detail, but they show that we are protecting the real value of all major benefits. Uprating in line with inflation will alone cost £1.7 billion next year, so Department of Social Security spending next year will reach £93 billion. In round figures, despite unforeseen pressures, that is actually the same figure that I announced a year ago and a year before that. As a result of our reforms, we expect in subsequent years to keep growth down to about 1½ per cent. in real terms. That moderate growth reflects the beneficial impact of the measures taken under the programme of reform that I initiated four years ago.
I have introduced a total of 12 Bills—including two in this Session—reforming sickness benefits, incapacity benefits, child support, pensions and jobseeker's benefits. The Budget contains a number of further measures to maintain the momentum of reform. They will help curb fraud, improve efficiency and increase fairness.
In addition to the new powers that we are seeking in the Social Security Administration (Fraud) Bill, Tuesday's Budget measures propose a further spend-to-save package on fraud. We will invest £470 million over three years in tackling fraud. That will finance 1.3 million more home visits to new claimants and 300,000 extra visits to existing claimants next year.

Mr. Malcolm Wicks: The Minister cut home visits.

Mr. Lilley: It is true that there were 3.5 million home visits during first half of the 1980s. They were an intrinsic feature of supplementary benefit and entirely different from the sort of visits that we will initiate. They were not for the purpose of establishing fraud, but to establish entitlement to benefit under a system that had many special needs payments on heating, rent—which was paid out of supplementary benefit—extra clothing and so on. Visits were necessary for all those payments. We also had one-off, exceptional needs payments and visits were usually required in those circumstances. There was also a welfare provision in supplementary benefit that required visits for welfare purposes, often as frequently as every six weeks, to families who were incapable of managing their budget or if there was a danger of neglect of children. Those visits duplicated the work of social services and were better undertaken by them. The need for that type of visit disappeared with the simplification of the system when we changed from supplementary benefit to income support, replaced single payments with


the social fund and replaced the complex array of different entitlements with a much simpler structure of income support and housing benefit.
The sort of visits that we will introduce now are designed to establish that people are genuinely entitled to benefit and that their circumstances are what they say they are. That is an important measure to cut out fraud and abuse.
We are also taking strenuous action to reduce the running costs of my Department. Much unnecessary work arises from incomplete, erroneous and late claims. The CHANGE programme has revealed that a high proportion—60 per cent.—of applications for income support are incomplete or incorrect and some 30 per cent. of our work involves chasing up information. So we propose to put the onus on claimants to furnish the evidence that can be reasonably required before their claim is assessed and we, in turn, will make it as clear as possible what information is required.
Late claims and backdating are especially costly, not least because the rules are so complex. I also propose, therefore, to reduce the confusing and inconsistent set of rules covering backdating of benefits to just two basic rules for most benefits. In future, if a claim is late, we will backdate the payment date by up to three months, provided—in the case of income-related benefits—that the claimant has good reason for making a late claim. If the claimant is already on benefit, we will backdate a claimed change in circumstances for up to one month.
I also propose to clarify the boundary between disability living allowance and attendance allowance. DLA is intended for people who suffer disabilities during their working life and so have less opportunity to earn and save. Attendance allowance is for those who come to need care in retirement. We intend to remove the current concession that allows a claim for DLA to be made for a year after the age of 65 and that change will come in from October 1997.
In the longer term, once it is possible to make further changes to the computer system from April 1999, people will have to wait seven days before receiving jobseeker's allowance, rather than the three days now. Waiting days have always been a feature of social security. Unemployment benefit was not designed to provide cover for moving between jobs, or for brief spells of unemployment. Other countries have similar waiting periods—Ireland's vary between three and 18 days, even Sweden's period is five days and New Zealand has the same seven-day wait as we propose.
Apart from the main growth areas of age and disability which I mentioned, spending is still growing in two other areas. The first is benefits for lone parents. Total spending is now about £10 billion on benefits for lone parents, which is equivalent to 5p on income tax. That is a problem that we have to face.
For decades politicians would not talk about the issue. Tax and benefit policy was squeezed to help single parents so that single parents gained more help than two parents. That policy has got to be reversed.
Those are not my words, but those of the hon. Member for Birkenhead (Mr. Field), the Chairman of the Select Committee on Social Security.
The hon. Gentleman went on to point out, rightly, that the Labour Government
introduced One-Parent Benefit—never part of any strategy, merely an attempt at a quick fix.
He was quite right.

Ms Angela Eagle: The right hon. Gentleman seems to be arguing that until the Budget, which proposes to "equalise"—I think that was the Chancellor's word—lone parents' access to benefit with that of married couples, there was an "incentive" for women to become lone parents. How does that square with the fact that lone parents have much lower incomes than married couples? For example, 40 per cent. of lone parents have to live on less than £100 a week, whereas only 4 per cent. of married couples have to do so. How can that be an incentive to become a lone parent?

Mr. Lilley: I did not present the matter in that way. To make the structure of benefits more generous to lone parents than to couples is certainly an odd signal to send out. However, no one pretends that that difference has been the primary factor in the growth of lone parenthood—although obviously it has helped to underwrite it.
I was telling the House that the hon. Member for Birkenhead had rightly described the history of one-parent benefit as essentially a short-term fix by the Labour party. The then Secretary of State, Barbara Castle, told the House:
there is to be an interim benefit … for the one-parent family … until the child benefit scheme comes into effect.
Later she added:
the benefit is purely a temporary one."—[Official Report, 13 May 1975; Vol. 892, c. 337, 339.]
But as the French say, nothing lasts like the provisional.

Mrs. Anne Campbell: Does not the Secretary of State consider that one of the best ways of reducing the welfare bill for lone parents would be to help them back into work? Yet he proposes to cut the one-parent benefit, which is not taxed, and has acted as a good bridge to help lone parents back into work. Why is the right hon. Gentleman cutting that, when it seems to be one of the most important ways of cutting the welfare bill?

Mr. Lilley: We shall provide the same structure and level of benefits for lone parents as for couples, which will still leave virtually the same margin between their position in and out of work. As I shall explain later, we have considerably improved the position of lone parents where it really matters—in help with child care.
As I was saying, one-parent benefit lingered on and on, and was duly mirrored by the lone-parent premium in income-related benefits. Yet the only identifiable extra cost that lone parents face is the cost of child care when they return to work.

Ms Liz Lynne: rose—

Mr. Lilley: I shall make a little progress first, if I may.
That is why I, with the help of my right hon. Friend the Secretary of State for Education and Employment, introduced the recognition of child care costs in family


credit. We increased the figure last year, so that up to £57 a week is now allowed. We are also encouraging the expansion of child care out of school hours and during holidays. The Department for Education and Employment initiative has created 72,000 places, and the Department is now investing a further £20 million, bringing the total to £64 million, to expand that initiative further.
We are also offering, through Parent Plus, help for up to 100,000 lone parents to return to work.

Mrs. Maria Fyfe: rose—

Ms Lynne: rose—

Mr. Lilley: I shall complete this section first, and the hon. Lady may find her question answered, if it has not been answered already.
The net result of the changes that we have introduced, plus the temporary measures introduced by the Labour Government, has been that couples who are out of work or on low incomes receive less money relative to their needs than do lone parents. That cannot be right. It sends out a strange signal when the state discriminates against married couples.
That is why we intend new lone parents who claim benefit after April 1998 to receive the same family premium and child benefit as married couples do. We shall protect existing lone parents, who will retain their present higher benefits.
That does not reflect any punitive attitude towards lone parents on our part.

Mrs. Anne Campbell: Rubbish.

Mr. Lilley: As I said in my famous 1993 party conference speech—although I made the mistake of putting it in prose rather than doggerel, so it is not remembered by the hon. Lady, or quoted so frequently by the BBC:
Many find themselves lone parents against their will. Widows, divorced and separated people struggle alone, but often successfully, to bring their children up well. They deserve not blame but support.
That is our attitude. Extra help has been given, but the best form of help is to help people find work and to help them in work, to help with child care and to help people obtain maintenance.
I had hoped that the Opposition would support those changes. After all, the hon. Member for Birkenhead told the Daily Mirror:
If One-Parent Benefit is phased out … it is a move we should support.

Ms Lynne: The Secretary of State seems to have skirted round the fact that it was the Conservative Government who introduced the lone-parent premium in 1988, to take into account single parents' extra costs. Why was that right in 1988 but not right now?

Mr. Lilley: In those days we did not have any extra help for getting back to work, through help with child care or through the Parent Plus scheme. We did not have the other measures that I reported to the House, either. According to most surveys, most single parents want help to get back to work, and I think it right to devote resources

to helping them by offering that help, and meanwhile to provide the same structure of benefits for them as for married couples who are out of work.

Mrs. Fyfe: The Secretary of State said a moment ago that single parents should be helped rather than attacked. Why, then, is he throwing 750,000 of them into poverty with the measures that he is introducing?

Mr. Lilley: That is not the case. It is not the Government who attack lone parents. After all, it was the Leader of the Opposition who told Brian Walden that he condemned those who chose to be lone parents and to bring up children alone.

Mrs. Anne Campbell: No he did not.

Mr. Lilley: He said:
I personally don't agree with them doing that.
If that is not a condemnation, how does the right hon. Gentleman go about praising people?
Apart from expenditure on lone parents, the other area of expenditure that is increasing significantly is expenditure on housing benefit and council tax benefit. That is set to rise by 7 per cent. ahead of inflation over the next three years.
It would be irresponsible to allow that growth to continue unchecked. Obviously it is in part a reflection of the rising number of new households, which is growing faster than the population—so much so that it is projected that there could be 4.4 million more households in 2016 than there were in 1991. Nearly 80 per cent. of that growth will represent one-person households.
It cannot be right to allow the benefits system to exacerbate that process. So I propose to restrict housing benefit for single people under 60 to the average rent for single non-self-contained rooms in each location. I also intend to limit further the sums that can be paid to tenants in the private deregulated sector.
Since January that group has received a maximum housing benefit that pays up to half the difference between the local average and the actual rent. The change will mean that from next October, claimants who choose to live in properties whose rents are above the average for that type of property in that area will have to meet the excess themselves, or negotiate a better rent with their landlords.
I also propose to align the treatment of council tax benefit for higher-band properties with the benefit treatment of mortgages. Currently, someone living in a band H property, which in England will be one valued at more than £320,000, can still have the entire council tax paid if he or she is on income support. That cannot be right.
I shall therefore bring the council tax benefit rules into line with those on mortgage interest. Benefit does not pay the full interest on loans of more than £100,000, and neither should benefit pay the full council tax for those whose properties are above the top of band E. In England that means properties worth about £120,000. I intend to implement this change in April 1998. It will affect about 65,000 people and save about £15 million in the first year.
In a press release put out on Tuesday by the hon. Member for Peckham, the Leader of the Opposition—[Interruption.] Sorry. I am promoting her—but only prematurely, I am sure. The hon. Lady, the Opposition spokesman on social security, claimed that
Tories failed on welfare because they have failed on work.
Quite frankly, she has ceased to engage with reality, and she simply ignores the huge falls in unemployment and the huge growth in the number of people in work in this country.
Let us compare Britain with France. The populations and economies of our two countries are roughly similar in size, but unemployment in France is more than 3 million and rising, whereas in this country it is 2 million and falling. If that is not due to the social chapter and the minimum wage, can the hon. Member for Peckham—or any Opposition Front Bencher—tell us which factors cause unemployment to be higher in France than in the United Kingdom? I shall be happy to give way to her. [Interruption.] Ah—she will deal with it when she has thought of the answer.

Mrs. Fyfe: Will the Secretary of State give way?

Mr. Lilley: If the hon. Lady were to provide an answer to my question, I would give way. But as I fear she will not, perhaps she can wait until I have finished this point.
High unemployment is the result of measures such as the minimum wage, the social chapter and greater union power—precisely the measures advocated by the hon. Member for Peckham. But if she wants to know the answer, she does not need to wait until she has found it and put it in her speech. She can go straight to the OECD, which recently reported that the reason why we have a relatively superior performance in our labour market and in unemployment to countries on the continent is our structural reforms, such as privatisation, lower tax and deregulation—every one of which she has opposed.

Mrs. Fyfe: Is the Secretary of State aware that only 41 per cent. of lone mothers in Britain work, but that 82 per cent. of lone mothers in France work? Is that because they are less workshy in France, or does it have something to do with the French state system of work availability?

Mr. Lilley: It may have something to do with work requirements in those countries, but it is due above all to differences in the age of children. A recent study compared the position in this country with that in other countries, and the biggest single reason why this country differs from the others is that we have had a large increase in lone parenthood. A large part of that increase has been made up of never-married mothers, who typically have much younger children than those who become lone parents through divorce. Those with children under five tend not to work in most countries, and we have a higher proportion of those children than other countries.

Mr. Alan Howarth: The Secretary of State has been scathing about the minimum wage. How does he justify his policy of not only permitting but encouraging employers to pay wages below

subsistence levels, and then requiring the taxpayer to eke out the difference in a spiralling benefits bill? Has he not, in effect, nationalised the minimum wage?

Mr. Lilley: When he sat on this side of the House, no one was more enthusiastic about helping people into work through in-work benefits than the hon. Member for Stratford-on-Avon (Mr. Howarth). Now that he sits on the Labour Benches, he has abandoned his reasonable and sensible attitude that wages are determined by the ability of people to contribute value to the process of production, and not by the virtue or evil of employers. Therefore, wages are not affected by changing laws but by improving the productivity and the economic performance of the country. That is what we are doing and why we are successful in creating jobs.

Mr. Howarth: rose—

Mr. Lilley: The hon. Gentleman has had the opportunity to discuss this question on both sides of the House, and I do not intend to allow him to give both sides of the question again.

Mr. David Shaw: My right hon. Friend has given an impressive elucidation of why we are creating jobs and other countries, such as France, are not. May I point out that a number of young people have come to my constituency from northern France to get jobs? They have all told me that they do not have a hope of getting a job in northern France because of socialist policies.

Mr. Lilley: My hon. Friend makes a potent point, and he is absolutely right.
The one concrete proposal that the Opposition have put forward to help with unemployment is to finance, by means of a one-off windfall tax, the creation of 250,000 artificial jobs for young people for one year only. It is a temporary scheme which, by some unexplained miracle, is supposed to produce a permanent solution to youth unemployment. It is incumbent upon the Opposition to tell us what will happen after that one-year windfall tax money runs out. Can the hon. Member for Peckham give me a single example from anywhere in the world where a one-off scheme for one year has created permanent jobs and solved the unemployment problem? She cannot, because there is no such example. Any serious measures to reduce unemployment must be financed and sustained on a durable basis.
The other success area that enables us to keep down the growth of social security while maintaining decent provision for our people is in the sphere of pensions. On average, pensioners' incomes are now about 50 per cent. higher than they were in 1979. We have achieved that partly through our success in encouraging people to provide for their own retirement. Britain now has £600 billion in funded private pension schemes—more than all the money invested to meet the costs of future pensions in all the other countries in the European Union put together.
Recently, the Select Committee on Social Security suggested that we might come under pressure to help pay for unfunded pensions on the continent. I can promise the House that we will not let our assets be combined with continental liabilities. But Labour has always said that it


will never allow itself to be isolated in Europe, so if other countries pressurise Britain to help bail them out, Labour will put feckless foreigners before thrifty Brits.
Labour also poses a threat to the basic state pension, and it has said that it will cut the pension to pay for allowing people to draw it from the age of 60. The Government Actuary says that Labour's policy would result in the pension being £20 a week lower for the rest of people's lives. Can the hon. Member for Peckham confirm what she said in a letter to me—that she does anticipate a lower basic state pension? She wrote to me in confidence, but I have given that opinion wider circulation. She will not confirm it to the House, and that speaks volumes for the openness that Labour intends to display to the electorate.
Over the past three years, Labour has criticised every reform that I have introduced. Collectively, those reforms will save £6 billion during the next Parliament. That is an extra £6 billion that taxpayers would have had to find had Labour's opposition been successful. But Labour has not just opposed our saving measures—it has proposed extra spending of its own. My right hon. Friend the Chief Secretary to the Treasury has set out more than £5 billion of additional spending proposals on social security which have been made by the Labour party and costed by us. So that is £6 billion plus £5 billion to make a total of £11 billion a year. That is the cost of letting new Labour loose on social security.
The measures announced this week will produce savings of more than £1 billion a year by the end of the century, in addition to those previously announced. They will maintain the real level of benefits, protect the most vulnerable, make treatment of couples and lone parents fairer, tackle fraud and curb the main areas of growth.
Britain is better placed than almost any other country in Europe to face the future. After rising for 50 years, social security should grow within the growth of the economy and take a declining share of our national income, enabling us to support the needy without burdening the economy.

Ms Harriet Harman: On Tuesday, we heard a last gasp Budget from a failed and discredited Government; 22 Tory tax increases will have cost the typical British family £2,125 more in tax by the time of the next general election. Ordinary families have to pay more of their hard-earned money in taxes to pay for the Government's failure. Nowhere is that failure clearer than in the welfare state.
The cost to the public purse has risen, and life for those on benefits is becoming harder and more degrading. The Tories are hitting the taxpayer and, far from protecting the poor, they are hitting them, too; they failed on welfare because they failed on work. The Government have failed to tackle poverty and unemployment and there are now almost 14 million people in poverty, compared with only 5 million in 1979.
Children in particular have suffered. Official Government figures show that one in three children is now born into poverty.

Mr. David Shaw: Is not the simple point that the hon. Lady is trying to make that the Labour Government were so mean in 1979 that they would not pay benefits to a

decent number of people, who therefore did not have colour television sets and material goods? We have broadened the system of benefits so that many more people have much better opportunities to obtain material goods.

Ms Harman: Then, we had a nation at work, not a nation on benefits. Now, increasingly, we have a nation on benefits—[Interruption.]

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. The Secretary of State had a reasonable hearing and I would suggest, especially to the hon. Member for Dover (Mr. Shaw), that the hon. Member for Peckham (Ms Harman), who speaks for the Opposition, should have the same.

Ms Harman: Thank you, Mr. Deputy Speaker.
One in five non-pensioner households now has no one in work. The Government have failed the unemployed, especially the long-term unemployed. We know that the longer people are out of work, the harder it is for them to get a job; 400,000 people have been jobless for more than two years. It costs the public purse £9,000 a year to keep someone trapped in unemployment. The total cost of long-term unemployment is £3.6 billion a year.
That is why we have asked for extra help for the long-term unemployed; for a national insurance holiday for employers who hire people who have been unemployed for more than two years; for a relaxation of the 16-hour rule, to help the long-term unemployed to get the skills that they need to get the jobs that are available; and for a national minimum wage, to end the low-pay economy with wages spiralling down and to provide wages that enable people to move from benefit to work and make it pay.
In the Budget, the Tories have done nothing to help the long-term unemployed off benefit and into work.

Lady Olga Maitland: Will the hon. Lady give way?

Ms Harman: In a moment.
The Tories have failed the young unemployed. It is a tragedy that so many of our young people feel that they have been thrown on the scrap heap before they have even begun; 600,000 people under 25 are unemployed—one in six. In some inner-city estates, half the people under 25 are out of work, and in London 60 per cent. of young black men are unemployed.

Mr. David Congdon: That is not correct.

Ms Harman: The hon. Gentleman says that that is not correct, but the figure comes from an answer to a parliamentary question that I tabled. Of the black men under 25 in London, 60 per cent. are registered as unemployed. The total cost of youth unemployment to the taxpayer in benefits, lost taxes and crime is £10 billion a year.
We have called for a windfall levy on the unfair excess profits of the privatised utilities so that we can use the money to get those 250,000 under 25-year-olds off benefit and into work or training.

Lady Olga Maitland: On trying to get young people back into work, does the hon. Lady accept that the


minimum wage would mean increasing some salaries, and that one man's increase is another man's job loss? Far from achieving its objective, Labour would cheat people of jobs.

Ms Harman: There has to be a floor under wages—a national minimum—partly because of the spiralling benefit bill: one person's low pay is another person's tax increase. We cannot have a spiralling down of pay and employers expecting the taxpayer to pick up the bill.

Ms Eagle: On the windfall profits levy, does my hon. Friend realise that, today, United Utilities declared its half-year profits and that it is making £845 a minute, representing an increase of 34 per cent.? Does not that justify the measures that the Labour party has sensibly suggested?

Ms Harman: My hon. Friend is absolutely right. Some of that money, which, after all, has come from the public via gas, water and electricity bills, should be ploughed back to deal with the urgent problem that is fracturing our society of a growing number of young people with no work, no training, no nothing, who feel that they have been thrown on the scrap heap. The Budget has done nothing to get them off benefit and into work.

Mr. Bernard Jenkin: Will the hon. Lady give way?

Ms Harman: I want to press on for a moment. I shall give way later.
The real map of poverty and unemployment stretches far beyond the official unemployment statistics. Among the poorest are those who are hidden from view because they are not in the official statistics, especially the lone mothers bringing up their children on the bread line.
The number of families headed by lone mothers is growing, and has reached 1.6 million. They are among the people who are dependent on benefits the longest. There are not only financial costs: such people bring up children who have never seen the world of work. Married women are increasingly going out to work, but lone mothers are falling out of the labour market. The proportion of married mothers in employment, whatever the age of their children, has increased since 1979, but the proportion of lone mothers in work has fallen.
Lone mothers want to work; they do not want to depend on benefit. The Government's policy for the past 17 years has been, "Here's your giro, come back when your youngest child is 16," and the taxpayer has had to pick up the bill. It is no wonder that the cost of keeping lone mothers and their children on benefit has reached £10 billion a year.

Mr. Jenkin: rose—

Lady Olga Maitland: rose—

Ms Harman: I said that I would give way to the hon. Member for Colchester, North (Mr. Jenkin).

Mr. Jenkin: I am grateful to the hon. Lady. Can she point to one piece of reputable research that suggests that

introducing a national minimum wage would make it easier for poor people to find jobs or reduce demands on the benefit system?

Ms Harman: We cannot use in-work benefits as a bridge for those who are out of work to go into work, as we should, if there is no floor under wages. Without such a system, the pay bill is simply transferred to the tax bill. I should have thought that hon. Gentleman would have understood that under the Government, the subsidy for low pay through in-work benefits has risen to more than £2 billion. That is one reason why he should agree with us about the minimum wage.
The way to get lone mothers out of poverty and cut spending on benefits for them is not by cutting the amount on which they have to live year by year and plunging them further into poverty.

Lady Olga Maitland: rose—

Ms Harman: I have already given way to the hon. Lady.
The Secretary of State mentioned Europe. We need to help get lone mothers into work, as happens in the rest of Europe. In France, 82 per cent. of young mothers are in work; in Britain only 41 per cent. are. Only half of young mothers are in work; the rest have to depend on benefits. In all other European countries, lone mothers work and support their children, and do not have to depend on the taxpayer. In Britain, they are stuck bringing up their children on the breadline.
We believe that the best form of welfare for people of working age is work. That is why we have set out a package of measures to tear down the barriers that prevent lone mothers from moving off benefit and dependence on the taxpayer and into work and self-sufficiency. They need a benefit transfer scheme, a personalised job and training system such that in Australia and a network of after-school clubs. Having never talked about them before, the Secretary of State, as the seconds count away to the general election, has suddenly mentioned them.
Only one in 80 children has access to an after-school club. One of the biggest problems for mothers of school-age children who want to get back to work is the difficulty of matching work responsibilities with school hours, INSET—in-service training—days, half-terms and holidays.

Mr. Lilley: rose—

Ms Harman: I welcome the Secretary of State as a new recruit to the enthusiasm that I have long had for after-school clubs. I look forward to his question on them.

Mr. Lilley: The scheme to encourage out-of-school places was initiated by my right hon. Friend the Secretary of State for Education and Employment; it is she who has been trumpeting it most loudly. It is very successful, and an extra £20 million is to be put into it—making a total of some £64 million. Can the hon. Lady say whether she intends to give an extra penny to out-of-school clubs?

Ms Harman: We have set out our plans for financing a network of after-school clubs. We want to use benefit transfer and lottery money and charge those mothers who


can afford it. We want to use public-private partnership. With a little help from government, the huge demand for such clubs means that they will spring up. It is no good the right hon. Gentleman saying that the Secretary of State for Education and Employment knows about them. I have read all his speeches and press statements and he has not mentioned child care or after-school clubs. He only criticises lone mothers, and not until the eleventh hour did he recognise their aspirations to work. They do not want to be on the benefits that he has so grudgingly handed out.

Mr. David Evennett: Will the hon. Lady give way?

Ms Harman: I shall not at the moment because I want to finish discussing our proposals to enable lone mothers to go to work—as they do everywhere else in Europe.
We need targets for training and enterprise councils to train lone mothers. We need lifelong learning through individual learning accounts to help lone mothers get hack into work. Instead of helping lone mothers get off benefit and into work, the Budget simply makes them poorer by cutting the value of one-parent benefit and lone-parent premium and eventually abolishing those benefits. The Secretary of State said in his press statement that the cut in benefits to lone mothers is part of his approach of being fairer to families, but it is not fair to the families of women who bring up children on their own. They will be worse off. If that is what he thinks is a family policy, he does not understand how families work. The cut in benefits to lone mothers will not cut the divorce rate or keep one family together. It will not prevent one divorce or separation—but it will make hundreds of thousands of the poorest children worse off.
The Secretary of State says that he is cutting benefits to lone mothers because they are at an advantage compared with married couples. The truth is that they are at a disadvantage. Perhaps he does not realise that when people move from being in a couple to being a lone mother, they become worse, not better, off. My hon. Friend the Member for Wallasey (Ms Eagle) was right. Some 47 per cent. of lone mothers live on less than £100 a week, compared with only 4 per cent. of couples.

Mr. Evennett: I have listened with great interest to the hon. Lady's comments. Does she pledge to restore lone parent premium in the unlikely event of her becoming Secretary of State?

Ms Harman: The proposals to cut the benefits of lone parents while giving them no help to get out to work are wrong, and we will oppose them. In government, we will have a welfare-to-work approach for lone parents. We cannot sort out the 10 billion benefit bill for lone parents by shaving their benefits bit by bit. We must help them back into work.
Lone parents are some of the poorest people in Britain. They face additional costs in bringing up their children alone. The Secretary of State thinks that child care is the only problem; if lone parents get into work, they can get child care disregard. He does not understand. Lone mothers not only do not have their partners' income; they do not have their partners' time. With two parents, when a child has a school open evening, one parent will go to it while the other will stay at home to look after the child.

Lone mothers have to pay someone to look after their children if they want to go to open evenings. Time is money for parents. Two-parent families have more time to look around the shops to get the bargain rather than having to buy the first thing available. They have more time to do that fifth repair on clothes rather than having to buy a new item of clothing.
In reality, it is more expensive to raise children alone, as the 1985 Government Green Paper recognised. The White Paper that followed it called for the
continued recognition of the need for specific further help for lone parents.
The research has not changed; nor has common sense. People know what it is like to bring up children alone. All that has changed is that the Secretary of State has failed on welfare because he has failed on work. He is determined to make lone mothers—the softest target—pay the price. There are now more lone parent families trapped on benefit bringing up families in poverty because the Government have failed to get them off benefit and into work.
The Budget has not helped anyone off benefit and into work. Its benefit cuts will deepen disincentives to work. From October 1997, single people under the age of 60 will be able to claim housing benefit only for rooms in shared homes. How will that work in practice?

Lady Olga Maitland: Why should it not?

Ms Harman: I shall explain. Perhaps the hon. Lady will then defend how it will work in practice. If people have a job and they lose it, they could lose their home. If people are looking for work and see a temporary job advertised, they will think, "I had better not take it because if I go off housing benefit and the job ultimately falls through, I could lose my home."
The woman who has lived with her husband in a private rented home will find that, if he dies, she will lose her home because she will have to move into a shared flat or house. She will not be able to stay in her one-bedroom house or flat after he dies. She will have to move into shared accommodation—so it is lose your husband, lose your home.
When the young man in his 30s living in a one-bedroom flat loses his job, he will lose his home because he will have to move into a shared flat or house—so it is lose your job, lose your home.
The woman in her 50s who has spent most of her adult life caring for her sick mother will find that, when her mother dies, she will lose her home. She will not be able to stay in a one-bedroom house or flat. So, after a lifetime of caring for her mother, it will be lose your home.
The Government seek to save £100 million a year ultimately by this measure. That contrasts starkly with the Department of Social Security's expenditure of more than £100 million on a new headquarters, Quarry house, which the Public Accounts Committee yesterday condemned. It published a report containing a devastating indictment of the spending on Quarry house. If the Secretary of State has not read it yet, I suggest that he does so right away.
Yesterday's Budget failed to get help to pensioners. It is a scandal that, after a lifetime of work or caring for their family, pensioners are some of the poorest people in Britain today. Pensioners have been hit hard by the


Government. The Government broke their promise and put VAT on gas and electricity. We called in this Budget for VAT on fuel to be cut to 5 per cent., but the Government failed to do that. The Government refused, so thousands of pensioners throughout the country will, as winter approaches, have to choose between heating and eating.
Almost 1 million pensioners do not claim the income support to which they are entitled. I have raised the matter on a number of occasions and, fortunately, there is now a growing awareness that many people who are entitled to benefits are not receiving them. Almost 1 million pensioners do not claim the income support to which they are entitled. They lose an average of £14 a week—more than £700 a year. Of those pensioners, 800,000 are women living on their own. They have no state earnings-related pension scheme, no occupational pension, no savings, no nothing.
So what has this Budget done for Britain's pensioners? It has made the situation worse. The existing income support form already deters almost 1 million pensioners from claiming their entitlement and, under the heading of simplification, the Secretary of State has announced that yet more obstacles will be put in the way of people who intend to claim income support by requiring more evidence to support their claim. The Secretary of State's proposals will deter thousands more.
The Secretary of State is oblivious. He says that the only reason why the poorest pensioners do not claim about £700 a year to which they are entitled is that they choose not to claim it; that they do not want it. He says in his fascinating letter to me:
The claiming of benefit is of course a matter of personal choice and there will always be those who choose not to make a claim.
One million of them are exercising their personal choice to be £700 worse off every year. It is unacceptable for the Secretary of State to adopt that attitude, because the truth is very different. The message to pensioners from the Government has been clear. It has been, "If you claim benefit, you are a scrounger. If you are a pensioner, you are a burden." The message to pensioners has been loud and clear, and it is why 1 million of them do not claim and so suffer hardship.
We have argued that the proposals in the Government's anti-fraud Bill for cross-matching data should be used to help get the income that they need to the poorest pensioners who do not claim, but the Government have refused. They are prepared to cross-match data to combat fraud, but they will not do it to help the poorest pensioners because they think that pensioners do not claim as a matter of choice.
Pensioners are worse off under the Tories. The Tories have cut the value of the basic state pension by £20 a week by imposing VAT on fuel. Pensioners are worse off because the Tories have cut the value of SERPS in half and undermined occupational pensions. The Secretary of State boasted about second-tier and occupational pensions. His attempt to expand personal pensions has been a shambles. There is now a great lack of confidence in the financial services industry. We have had the scandal of mis-selling. There are now fewer people every year in occupational pension schemes. Pensioners fear that they will have to sell their homes to pay for long-term care.
I want to take this opportunity to challenge the Secretary of State on his plans for the basic state pension. Will he deny the reports in the newspapers that he plans to do away with the basic state pension? Will he deny reports that he plans to means test the basic state pension? Will he deny reports that he plans to privatise SERPS and force people into poor-value, risky personal pensions?

Mr. Lilley: Yes, I will deny all three things. Now will the hon. Lady answer my question? Does she or does she not intend what she said in her letter to me—to introduce a lower basic state pension for those retiring at 60?

Ms Harman: I will deal with the hon. Gentleman's question—[HON. MEMBERS: "Ah."] I will deal in 30 seconds with the Secretary of State's questions about the flexible decade of retirement. He has denied that he intends to do away with the basic state pension, that he will means test it or that he will scrap SERPS. The trouble is that there is a pattern here. This is exactly what happened before the last general election on VAT on gas and electricity. Rumours abounded, denials were categorical. The Tories won the election and immediately put VAT on gas and electricity. One thing that pensioners know is that they simply cannot trust the Tory Government.
Not only do the Tories wholly misrepresent their own plans, they misrepresent ours. Let me take this opportunity to say something about the flexible decade of retirement—as the Secretary of State mentioned it. In the past few years, a change has happened, and people now choose to retire at different ages. There has been a change in the old system whereby people got a job and worked full time for their entire working life from 15, when they left school, until they retired at 65 if they were men and received the basic state pension. Many people now want to retire earlier. All that we are saying is that if flexibility on the basic state pension means that individuals who have savings or a good occupational pension can choose to draw down their pension early at no cost to the public purse and can be certain that they will not fall back on the state later, why should they not exercise that personal choice? Why should we have a one-size-fit-all welfare state?
The Secretary of State has bounced from saying that our proposal would cost everyone £13 billion—

The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): No, £15 billion.

Ms Harman: He said that it would cost everyone £15 billion immediately and that it would mean a cut of £20 a week in everyone's pension. All that we are saying is that there should be more flexibility and choice. The Government should accept that instead of trying to rubbish it.

Mr. Lilley: What greater flexibility is the hon. Lady proposing to introduce than exists at present? Anyone who defers taking the pension by a year receives an increment of 7.4 per cent. for the rest of their life, twice that if they defer for two years, and so on. We have that built into the present system. The only difference between the hon. Lady's proposals and ours is that she would let


everyone retire at 60 rather than 65, but people would have to do so on a basic pension which was £20 a week less for the rest of their life.

Ms Harman: The Secretary of State understands that we are not forcing anybody to retire early. He has recognised the flexibility in being able to retire after the pivotal age of 65. If people postpone their retirement until after 65 or 60, they can draw down their pension at a higher rate. All we are saying is that there should be a bit of flexibility and choice for those who want to retire earlier and draw down their pension at a lower rate. The Secretary of State is making a big mistake in giving plenty of publicity and exposure to our proposal for a more flexible welfare state that meets modern patterns of employment. When people discover our proposal, thanks to the right hon. Gentleman, it will be popular with them.

Mr. Heald: Between now and 2010, when the arrangements change, the pensionable retirement age for women will be 60. Is the hon. Lady seriously saying that, between now and 2010, she would cut women's pensions by £20 a week?

Ms Harman: Conservative Members are becoming more desperate and advancing ever more ludicrous, complex and unrealistic suggestions. The point is simple: the pivotal age is 65 and will be for both men and women. All we are saying is that there should be flexibility before the pivotal age, as there is after it. I shall move on, because I do not think that Conservative Members understand even that simple point.
The cost of the Government's failure to tackle poverty and unemployment is borne not only by those who claim benefits, but by the taxpayer. As this is the last Budget before the general election, today's debate provides an opportunity to review the Secretary of State's record, about which he boasted at the start of his speech.
When the right hon. Gentleman became Secretary of State, he claimed that he would cut the social security budget, but he has not. During his years as Secretary of State for Social Security, the budget has increased by more than £14 billion a year. That is his record.
The Secretary of State claimed again today that he has at least cut the growth in social security spending to less than the growth in GDP, so that the economy now grows faster than the social security budget. That is, however, what always happens when an economy begins to move out of recession. To the extent that that has happened, it is nothing to do with him, but is entirely cyclical.
The right hon. Gentleman claimed again today that it is the cost of universal benefits, particularly pensions, that has driven up the social security bill, but it is not. Two thirds of the increase in spending on social security is due to the growth of income-related benefits, which is the direct result of poverty and unemployment. It is not demography that is pushing up the social security budget, but poverty. It is not the elderly who are pushing up the social security budget, but this Secretary of State.
The consequence of the Government's failure on work is that, under the Tories, Britain has become divided as never before. The Government have created a fractured society, with a gaping chasm between those who are okay and those who are at the absolute bottom. Under the Tories, the welfare state is losing popular support: those who have to

depend on it resent it and those who have to pay for it resent it. One of the reasons why a growing number of people resent the welfare state is that they do not want their hard-earned money being ripped off by fraud.
No matter where fraud is committed on the public purse, it must be stamped out. The welfare state must, at all times, remain vigilant in the battle against fraud. However, although the Secretary of State has claimed that he will save billions on fraud, he will not take the tough measures that are required to clamp down on fraud. In particular, he will not tackle organised landlord fraud—which has partly caused the spiralling benefit bill—because he is in the pocket of the private landlords.

Mr. Lilley: rose—

Ms Harman: I shall not give way until I have asked the right hon. Gentleman this: if he is serious about fraud, in addition to checking up on individual claimants, why will he not introduce a tough new offence for landlords that is backed by tough new penalties, or allow councils to stop paying money to landlords and pay it instead to tenants? Why will he not do that? All his assertions are worthless if he does not.

Mr. Lilley: The hon. Lady knows that we have done that. I ask her to withdraw her statement that I am in the pocket of the landlords. It is untrue and dishonourable.

Ms Harman: His party—[HON. MEMBERS: "Withdraw."] I shall rephrase my assertion and see whether we can come to an agreement about the situation.

Mr. Lilley: On a point of order, Mr. Deputy Speaker. Is it in order to ascribe to any hon. Member a pecuniary relationship with people with whom they do not have such a relationship, or to say that they are in the pocket of an interest group when they are not and when they certainly do not take money from trade unions?

Mr. Deputy Speaker: Order. Am I to understand that the hon. Lady was talking about the Government at large and not an individual?

Ms Harman: I was talking about the Government at large and about a political relationship, not a pecuniary relationship. The record of this Government is that they have stood idly by while the public purse has been ripped off because they have not been prepared to take action against landlords who are making themselves millionaires at the expense of the public purse. If the Secretary of State wants to show that he is prepared to take action to protect the public purse, without fear or favour, he will adopt our recommendations in respect of the Social Security Administration (Fraud) Bill.
The welfare state has an important role to play as part not only of an efficient economy, but of a just society. There have been huge social and economic changes since Beveridge created the welfare state in 1945. Those years have seen more women working, more lone mothers because of family breakdown, the end of the family wage with the fall in manufacturing, the end of the job for life, the end of skills that last a lifetime, a massive rise in economic activity; and an aging population as people live longer.
Those are challenges that the welfare state can meet, but it needs to be renewed so as to move ahead of economic and social change, not lag behind it; and to have the flexibility to respond to the diversity of people's lives, including the flexible decade of retirement. It must accompany a dynamic economy—it cannot be an alternative to work. It must bind our fractured society and be a force for social cohesion. The welfare state must develop a new balance of rights and responsibilities between the individual and the state. Welfare to work is the way forward, and it is the path that will be taken by Labour in government.

Sir Terence Higgins: For hon. Members who are not standing at the next election, its approach leaves us in the same position as that of the opera singer who is making a final appearance for the 99th time. One makes a final appearance at the Queen's Speech debate, at one's mayor's banquet, at one's association dinner and, now, at the Budget debate. The experience makes me feel rather like Frank Sinatra.
It is normal on these occasions to sing one's most popular song and I want to repeat the point that I made during the debate on the Queen's Speech, which is that I still have grave reservations about the concept of a unified Budget. I have deployed the arguments on previous occasions, but I want to emphasise that there is a real problem in relation to timing.
After the summer recess, we have a brief spillover in which the Queen's Speech debate takes place and then the debate on the Budget. Then we have Christmas, after which Treasury Ministers and officials can go on holiday until the next summer recess. That is not a satisfactory arrangement. If we are not going to move the Budget from this time of the year—I understand that the Chancellor and the Treasury are rather in favour of keeping it at this time—there is at least a strong case for moving the Queen's Speech debate to the spring. I hope that hon. Members on both sides of the House will consider that carefully.
I congratulate the Chancellor on not only what I regard as a prudent Budget that takes due account of the balance between monetary and fiscal policy, but on creating the situation that the economy is in. As he rightly pointed out in his Budget statement:
The British economy is in its fifth successive year of steady. healthy economic growth, with falling unemployment and low inflation."—[Official Report, 26 November 1996; Vol. 286. c. 154.]
That has been accompanied by the best inflation performance for nearly 50 years and restrained growth of earnings, which is good news for jobs, and the current account is in the best overall trading performance for 10 years. That is a remarkable achievement and it provides a firm basis for further progress.

Mr. Alan Howarth: Does the right hon. Gentleman regard it as a mark of prudence when the Chancellor, in his last Budget before the general election, tells the House that, in the year to come, consumer spending, which is anticipated to rise by 4.5 per cent. in the next year, will be

the driving force of the economy, and when he adds fuel to the flames by cutting direct taxation? Is that really prudent economics?

Sir Terence Higgins: I shall deal with the whole area of policy in my main remarks.
I shall pick up on the speech made by the hon. Member for Peckham (Ms Harman). I am sad that the level of debate has been depressed to the stage where we have soundbites about 22 tax increases when the list itself is unbelievably ill-defined and does not really justify the claim at all. To lower the debate to that standard seems quite extraordinary and I would not wish to pursue that line.
I want to take up a point that the hon. Lady made about flexible retirement, because she was very careful with her words. She said, "It's all right if there is flexible retirement providing that the people who are exercising their discretion in that respect don't subsequently become a charge on the state." That passage cannot have been chucked in as a throwaway line, unless it was a straight slip of the tongue. It is worth examining exactly what that meant. I look forward to some elucidation, perhaps in the winding-up speech. The wording that she employed is interesting.

Mr. Bernard Jenkin: Is not the key point about introducing flexibility for retirement the fact that the vast majority of people are likely to take that option, and that brings forward the point at which their state retirement package becomes a liability on the state and is a significant net increase in public expenditure, which is yet another uncosted promise by the Opposition?

Sir Terence Higgins: There are a considerable number of those. I understand very well the point that my hon. Friend rightly makes.
I have, after 33 year in the House, lost count of how many Budgets we have had, but it is worth reminding people that, under Labour, we not infrequently had more than one Budget in a year. We should bear that in mind, although I am always hesitant to hark back to the previous Labour Government, because a large number of people who will vote at the next election were not born at that time.
One thing on which I do reflect, however, is the way in which taxes come and go. I am afraid that we are probably stuck with income tax, but the Government have made it clear that the sell-by date for capital gains tax and inheritance tax is rapidly approaching, and I welcome that. It is also the case that, over the years, taxes have changed. I well remember a former Chief Secretary of the Labour Government being quite clear that the selective employment tax that he had introduced would last for ever. In fact, when I was at the Treasury, we abolished both that and purchase tax. We introduced value added tax. I feel bold to say that VAT will probably continue. The Labour party's proposal for a windfall tax is certainly not something that I would ever wish to support.
I intervened in the debate yesterday and asked the shadow Chancellor whether the windfall tax would raise more or less than £2 billion. I got no answer, of course, but he went on to say, in a quite extraordinary statement:
The windfall tax is not a tax on ordinary families."—[Official Report, 27 November 1996; Vol. 286, c. 366.]


We need to examine carefully where the money is coming from. For a number of the privatised industries, there is a system of regulators.

Mr. Garrett: Will the right hon. Gentleman give way?

Sir Terence Higgins: No, I have given way twice already. I do not want to take up too much time.
The proposal is that Labour will tax the windfall profits—the excess profits. Either the regulators for those industries are doing their job—in which case there will be no excess profits to tax—or they are not. It seems that the Labour party's expectation is that the regulators will not be doing their jobs, and if that is so, the Labour party is positively encouraging higher prices in many of the public utilities—many of which provide services that are very important for people on low incomes—which they will then tax. The reality is that the tax will be paid by ordinary people. Ultimately, that is where the money will come from. For that reason, it is not a tax of which we should approve.

Ms Eagle: Does the right hon. Gentleman agree that United Utilities' profits, which, as announced today, are running at £845 a minute, are excessive? I can tell him that most of my constituents think that they are.

Sir Terence Higgins: I did not express any view on that. I said that one of two things will happen: either the regulators—I shall come to another point about competition—will keep profits down, or the profits will be excessive, and at the end of the day it is the consumer who will pay. Instead of discouraging that, the hon. Lady wants to tax, to take away excess profits and give them to the Treasury, when in fact they are being paid ultimately by consumers.
It is clear that some privatised industries do not have regulators, but they are competing elsewhere in the economy. It is not at all clear in those circumstances, because we are simply not told how wide the scope of the windfall tax will be, whether the tax will extend to the competitors of the former privatised industries as well as the former privatised industries themselves. The fact is that either the tax has not been thought through, which may well be the case, or the Labour party is simply not prepared to spell out what it really involves. That is much more likely to be the case.
I make a final comment—this is perhaps the last occasion on which I shall have the chance to do so—about local authority taxation, which has been fairly disastrous over the years. We had the rates system, which caused endless problems, the poll tax, which perhaps was not a wild success, and we now have the council tax. My own feeling is that there is a strong argument for transferring the cost of local services entirely to the Exchequer. The argument, "He who pays the piper calls the tune," has long since been invalid, because a high proportion of local government expenditure is financed from the central Exchequer anyway, and we had only to hear the statement from the Secretary of State for the Environment yesterday to realise that. I hope that, in the next Conservative Government, the costs of local government will be transferred to the central Exchequer and that there will be a block grant, leaving local councillors with an important role to play in allocation of resources.
The economy is reaching a critical stage, because whenever one is recovering from a recession, the crucial point arises as to the stage at which the Chancellor should appropriately damp down the level of increase in aggregate demand. The answer that I gave to the hon. Member for Stratford-on-Avon (Mr. Howarth), who intervened earlier, was that, given the stage that we are at in the recovery, the balance that the Chancellor has struck is entirely appropriate and prudent. It is a difficult decision, however, as we have found in the past. It was certainly difficult at the time of what has become known as the Barber boom: it was hard to judge when to slow down the growth in aggregate demand—although I feel bound to point out that the background was one of horrendous increases in world commodity prices and entirely different industrial relations. There were similar problems in 1990. It is important for the Chancellor to get it right this time.
Table 3.10 of the Red Book, on page 54, gives figures of 2.5, 2.5, 3.5 and 3 per cent. for growth in GDP in 1995, 1996, 1997 and 1998 respectively. That must be related to what is happening to the productive potential of the economy. In an interesting passage, the Red Book comments:
While productive capacity probably grows fairly steadily, actual output growth varies more.
That is certainly the case. The passage continues:
Output fell well below its trend level in the early 1990s recession. Growth was probably significantly faster than trend during 1993 and 1994, and the output gap therefore began to narrow. However, growth was slower in 1995 and the first half of 1996, and the output gap is unlikely to have narrowed much further over this period.
The Red Book concludes:
there is still a negative output gap of between 0 and 3 per cent. of GDP.
In those circumstances, I think it entirely appropriate that the Chancellor should plan the increase to which I have referred over the next three years; but I also think it important for him to make it clear that the rate of growth that he forecasts will not continue indefinitely. As we approach the productive potential ceiling, aggregate demand should go up only at the same rate as that productive potential. I very much hope that the Chancellor
will bear that in mind.
On page 88 of the Red Book, a table shows the percentage of GDP taken in total taxes and national insurance contributions. All the other forecasts cover a relatively short period up to the first half of 1998, but, to my surprise, this table goes as far as 2001–02. Perhaps, when she replies to the debate, my hon. Friend the Economic Secretary to the Treasury will explain why we have projected the figures so far ahead. My strong feeling is that the assumptions on which that forecast must be based, with regard to economic growth, unemployment and taxation, must be very uncertain, and I am doubtful about the virtues of extending economic forecasts as far ahead as 2001–02. I am also not at all clear about the extent to which the forecast makes allowance for the Government's spend-and-save programme, which is obviously very important. I hope that that can be clarified, but, as I have said, I consider the present overall position extremely satisfactory.
I hope that the Treasury Select Committee will look intensively into the contents of the Red Book. There has been considerable confusion over the past two days,


and it is important for the Committee to clarify a number of aspects—and, as on previous occasions, improve Government accountability. It must clarify the precise content of the Chancellor's speech, so that in due course we can debate it on Second Reading of the Finance Bill.
Over the centuries, the House of Commons has been based on the control of money—both the right to raise taxation and the right to spend the proceeds of that taxation. Not only the power but the procedures of the House have been built on that. I do not want to anticipate the debate that we shall have on the documents that proved so controversial earlier in the week, but for that reason I find it difficult to comprehend why, if we are to have a so-called stabilisation pact, it is appropriate to introduce a system in which that is enforced by fines on a sovereign country. We should have regard to the basis on which the House has been established.
I do not for a moment dispute the Chancellor's point that, if there is to be what I would prefer to call a core rather than a single currency, there must be a degree of conformity between the member states that decide to participate in that core currency. Nevertheless, I doubt very much whether it is appropriate for such an arrangement to be enforced rather than agreed, in the manner proposed in those documents.
I am grateful for the opportunity to speak in the debate. I congratulate the Chancellor again, and wish him well—as, indeed, I wish the next Conservative Government well.

Mr. John Garrett: The right hon. Member for Worthing (Sir T. Higgins) suddenly struck a chord with me: I am now tempted to talk about budgetary reform, which I was not going to do.
I am pleased to say that I advocated a unified autumn Budget and resource accounting to the Procedure Committee in 1969. I have found in the past that my public accounting proposals take about 25 years to come to fruition, like some suggestions I used to make about state audit; but I must give credit where it is due. My party has always completely ignored my proposals, although I except my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon).
The Budget scheme and format, especially as regards public expenditure, is now far more informative than it was when I first came to the House, except for the performance indicators. Some of the performance indicators that the Government attach to spending programmes are completely pointless, and I hope that the Treasury will try to improve them.
I want to talk about some aspects of poverty, but before I do I must make a constituency point. In his speech, the Chancellor referred triumphantly to the £190 million private finance initiative project for the Norfolk and Norwich hospital. He did not acknowledge that using the PFI route has incurred not only considerable cost but a delay of at least three years in the provision of a hospital for which we have been waiting for more than 20 years. Nor did he tell us what would be the extra cost of building and running a hospital whose contractor will have to borrow money at a higher cost than the NHS would ever incur, and will also have to show a profit for its shareholders.
I am familiar with the Government's argument that anything private is run more efficiently than anything public, but I spent more than 20 years professionally measuring productivity, and it never struck me that that was the case. I believe that there is a correlation between productivity and size, but not between productivity and the form of ownership—but I digress.
The Chancellor was not to know that the new hospital will be in the wrong location, that it will be hard to get to and that it will have only 800 beds to replace the 1,400 in the existing two hospitals in the city centre, access to which is easy, and which will have to close.
The increase in health funding for the election year will be followed by deep cuts in health expenditure. Prescription charges will rise again—the Chancellor did not mention that at all—as will the maximum dental charge, for those who can find an NHS dentist. It is extremely difficult to find one in my constituency. Capital funding for health care is being cut, and, even if we allow for the reliance that is being placed on the PFI—which, to my knowledge, has produced only one hospital so far—the total cash for hospital building is falling by nearly 10 per cent. In total, real-terms spending on health care is flat for the next two years, and will fall after that.
The background economic judgment is that there should be a pre-election consumer boom, so consumer spending is to rise by the amazing figure of 4.25 per cent. If we add rising house prices and a £20 billion handout from building societies next spring, we have a stoked-up boom that can end only in a post-election bust. The forecast is for some rise in capital investment, which is currently contracting, and for a rapid increase in export volume. It is difficult to see why there should be an increase in export volume, given the rising pound.
We learnt from the Secretary of State for the Environment the other day that we will require 4.4 million new homes in the next few years. So what do the Government do? They cut the Housing Corporation's budget from £1 billion this year to £650 million next year, whereas three years ago it was £1.8 billion. That and local authority cuts will mean that only 30,000 new homes for rent will be built each year, which is half the Government's stated target.
The Chartered Institute of Housing said that the Government do not care about housing—I think that that is true. The cut in housing will lead to 5,500 fewer jobs in the construction industry. In the six counties of eastern England, including Norfolk, housing starts will drop to 1,563, which is a drop of 2,196. In Norwich this year, housing associations will produce 119 homes. A proportional reduction will mean that 77 new homes will be built in 1997–98, 20 of which will not be newly built or rehabilitated units, but either shared ownership properties or existing tenancies released as a result of incentive schemes. We will probably build about 70 houses to cover approximately 2,500 households on Norwich city council's waiting list.
In other local government areas, the Government allowance is due to rise by 1.5 per cent. Most local authorities have little in their reserves to add to that. This year, the county of Norfolk has been able to maintain its services only by taking £7 million from balances. Allowing for inflation and other cost increases, the county will require a rise in spending of more than 7 per cent.,


which will not be funded by Government. Norfolk county council's annual spend would have to rise by £23 million to bring it up to the average per head of English counties.
The Government are simply switching taxation from central Government to local authorities: 1p comes off income tax, and the council tax is increased by 6 per cent. What does the Budget do for our fellow citizens who are in poverty? The 250,000 single tenants suffer sweeping cuts in housing benefit to raise a mere £100 million. Future single parents will lose £6.30 a week in one-parent benefit, and those on income support lose a lone parent premium of £5.20. Existing single parents have their benefits frozen.
In the 16 years up to 1995, the number of children living in poverty tripled to just under 3 million, with more than one fifth of families on income support. The number of children living on what used to be called national assistance has risen from 272,000 in 1948 and 920,000 in 1979 to 2.9 million in 1995. I was raised on national assistance, and I remember it well.
National statistics show that 25 per cent. of our children live below the poverty line, which is defined by the European Union as less than half the national average income. A survey by the National Children's Home revealed that, for 1.5 million families, basic social security provision is not enough to pay for the diet prescribed as the minimum for a child in a workhouse in Bethnal Green in 1876.
A Rowntree Foundation report last June showed that, as a result of breaking the link between average earnings and benefits, families were £6 a week short of being able to provide "minimum essential" items for a child under two, and £11 short for each child between two and 11.
The United Nations human development report of 1996 cited Britain as one of the most unequal countries in the world—more unequal than the United States, and as bad as Nigeria. Against that background, the Chancellor stokes up a consumer boom, which depends on the well-heeled furiously spending their tax reliefs.
Let us look at the real needs of the country, such as capital investment in plant and equipment and infrastructure. The Government's capital spend will fall from £10 billion to £6.5 billion in three years. Their estimate that the gap will be made up by the private finance initiative raising £10 billion in three years is hopelessly optimistic—look at its record so far. On education and skills, we are 42nd in the world skills league. One in five families has no one in work. Since 1979, we have fallen from 13th to 18th in the world prosperity league.
As the Financial Times pointed out, the Budget is particularly hard on women, because of the loss of single parent benefit, the small tax relief for the low paid, 70 per cent. of whom are women, and the freezing of child benefit.
The Government will be lucky to avoid raising interest rates before the general election. The Chancellor has taken that gamble. The whole Budget is a gamble, and offers nothing for the growing army of the poor.

Sir Graham Bright: I shall deal with two aspects of the Budget. First, when the measures on low-sulphur diesel fuel were announced, many people

were left wondering what they were all about. On 17 April this year, I initiated a debate on air pollution. During the debate, I outlined clearly the effects on the health of the nation of particulate matter blowing into the atmosphere. About 4 million adults and 1 million children suffer from respiratory problems. There is a real need to address that problem.
I appreciate the fact that we are spending another £1.6 billion on health this year. It is more important to prevent some of the problems than to deal with them once they arise. I appreciate what the Treasury has done in that respect.
The Chancellor mentioned black smoke. Black smoke is made up of fine particles. The average London bus pushes out 1.5 tonnes of soot every year, as do large lorries. That dust is carcinogenic: it is dangerous stuff. We all breathe it in, so we must address the problem.
Low-sulphur diesel is just one step. It reduces sulphur and other pollutants in the atmosphere. More important, it enables technology to introduce continuously regenerating traps into the exhaust system to take all the dust pollutants out of that exhaust. I commend Westminster city council for insisting that that system is fitted to all council dustcarts that operate around the House.

Mr. Heald: Johnson Matthey.

Sir Graham Bright: Indeed, Johnson Matthey has pioneered that technology. It costs about £3,500 to fit a bus or other vehicle with that equipment. The £500 a year reduction in the road fund licence that will be offered for vehicles that conform is a real fiscal measure to encourage bus and lorry operators to be more environmentally friendly. That will have a huge impact in London and in any urban environment, including the constituency of the hon. Member for Norwich, South (Mr. Garrett). We cannot escape pollution in an urban area, so I applaud that measure.
I was not privy to the leak that most people saw the day before the Budget statement, so I was amazed at how spot on the Chancellor was, because he provided everything for which I had asked in April.
The Chancellor proposes a reduction of 25 per cent. in the duty on liquid petroleum gas and compressed natural gas. A vehicle can use natural gas—it is available to anyone through the normal gas system by means of a compressor operation that one can recharge. I am delighted that the Department of Trade and Industry has a couple of cars running on that fuel. It is the purest form of fuel and does not pollute the atmosphere at all.
That reduction is another fiscal measure that will encourage development. I have had several meetings with Shires, the bus operator in my constituency. It readily admits that natural gas is back on the agenda and that it will probably be viable. For me, an asthmatic who has been campaigning for that, the measure is very welcome. I offer my right hon. and learned Friend the Chancellor my thanks and the thanks of fellow sufferers and the medical profession for recognising the problem and for dealing with it in such a way. I am delighted to flag up that point, which otherwise might have been overlooked.
Luton is very much a microcosm of the economy. I take a great interest in what is going on and why. The environment that the Government have created


encourages business to invest; it has certainly generated the growth from which we are now benefiting. The Budget will keep that successful economic environment running; indeed, it is the most important thing that the Budget will do.
Luton is an exception in the south-east in having a well-balanced local economy with many manufacturing and technology-based companies. It has world-class companies such as Vauxhall, Monarch, Britannia and Whitbread. It also has hundreds of successful small and medium-sized companies. I am sure that when my hon. Friend the Member for Colchester, North (Mr. Jenkin) speaks later, he will agree with me that it is excellent news that the Government are dealing with the problem of rates and intend to freeze rates for small companies. That is extremely important if we are to help small businesses grow into large businesses, as then they can employ more people.
Luton has been at the forefront in adapting to the challenges of the next millennium and encouraging the development both of its businesses for the future and of the associated skills required by the work force. Luton's record in generating exports is second to none. I take my hat off to the chamber of commerce for the way in which it has encouraged exports.
It should come as no surprise that recent surveys have shown that businesses in Luton report higher order books, more investment and higher levels of confidence, which is obviously good news for all who live and work in that town. It is living proof that the Government's economic policies are working. However, if I have a criticism of Government policy—and I occasionally have a little criticism—it is that because Luton is so successful in taking advantage of the current favourable economic climate, it suffers in comparison with comparable areas in other parts of the United Kingdom when it comes to grants.
I know that we have received £4 million for the Luton and Dunstable regeneration scheme, but that is a small amount compared with grants received by many similar towns in the north, the midlands, Wales and Scotland. Just because Luton is in the south does not mean that it does not need help. I am not convinced that there is a level playing field—indeed, I know that there is not—in the assessment of which areas receive Government help. I should like that corrected.
I shall illustrate the problem. Vauxhall has been in this country for many years and in Luton since the 1920s. During recent years, it has invested £450 million in its plant in Luton, which produces the successful Vectra. That contributes enormously to our balance of trade—

Mrs. Anne Campbell: And pollution.

Sir Graham Bright: The cars are fitted with catalytic converters.
Some 80 per cent. of the new estate car production is exported. However, Vauxhall has received no help, whereas Nissan, Toyota and other car manufacturers have received help. That does not help to persuade companies

such as Vauxhall to stay put; indeed, it may make it want to move. That is not good news for Luton and that concerns me.

Mr. Garrett: Vauxhall had plenty of assistance to relocate on Merseyside not long ago.

Sir Graham Bright: I am talking about keeping manufacturing jobs in the south-east. I represent Luton, not the north-east. I am proud to represent Luton and I will continue to represent it for many more years.
Luton is the economic dynamo for Bedfordshire and beyond. It is set to consolidate its current successes and to develop new opportunities for businesses and jobs, because it has all the main ingredients for future success. It has an excellent transport infrastructure. More and more passengers, especially business passengers, are choosing to use our airport. There is access to the M1 and the M25. There is an excellent rail service—and I am looking forward to its being privatised as I am sure that that will improve it even further.
Despite all that, there is much more to come. Luton airport is continuing to develop its services. It will be greatly assisted when the new Parkway station is built. It is to be the new interchange in Luton, financed by the private finance initiative. It will be a huge generator of employment in the area and it will be a magnet for businesses—not only airport-related businesses, but the corporate headquarters that are moving to towns such as Luton. That is good news and it illustrates the stage that Luton has reached and how we are financing our success.
It is not just the excellent transport system that is receiving huge amounts of investment. Prudential Insurance has invested millions of pounds in refurbishing the Arndale centre, which is the main shopping centre. I am pleased to say that it is in the centre of the town, not out of town. That refurbishment has increased the centre's attractiveness to shoppers and has led to new retail outlets setting up there. It is a real success story of private investment.
As I said, Vauxhall has invested its money in Luton, preferring to stay there rather than move to other European locations. The hon. Member for Norwich, South pointed out what was happening in the north of England; I am worried about what is on the other side of the channel. I want to ensure that Luton is an attractive environment. Britain is attracting almost half of all inward investment and I want to ensure that we keep it that way. Companies come to Britain not because they like it, but because it has the right economic environment. That is the only reason why they come here.
Much of our success has been achieved not by the interventionist approach favoured by Labour Members, but through the sort of private investment that is leading Luton into the next century. That private investment is there only because of the climate of enterprise that the Government have generated. Low tax, low inflation, low interest rates, sound public finances, reducing the burdens on business and ensuring high education standards and skill levels—those are the reasons why so many companies are investing in Luton. It is a microcosm of the rest of the country.
Those Government policies have created an economic climate in which businesses can thrive. Successful business means more jobs and more jobs mean better


standards of living, both for the people of Luton and for people throughout the rest of the United Kingdom. Luton will play a major part in ensuring that this country becomes the enterprise centre of Europe—and it will do so only because of the Government's successful economic policies, which will continue as a result of the Budget announcements. I congratulate my right hon. and learned Friend the Chancellor on this year's Budget measures. They will build on the solid foundations that have been laid in the past 17 years of Conservative government. The measures lay out the strategy for a prosperous future for all who live in Luton and in the rest of the UK. They should be supported enthusiastically by the House.

Ms Liz Lynne: It is important that we discuss, among other things, social security uprating, but we must also talk about the many people who are not receiving the benefits to which they are entitled. Last week's Department of Social Security estimates of the take-up of income-related benefit, particularly those for pensioners, were extremely depressing. I make no apology for mentioning that, even though I mentioned it in Monday's debate. One million pensioners are not receiving the income-related benefits to which they are entitled and the take-up rate for pensioners is deteriorating.
We need a national advertising campaign to ensure that those pensioners realise what they are entitled to. We have an advertising campaign for the benefit fraud hotline and for the Child Support Agency in Greater Manchester. If we can have such campaigns for those things, why cannot we have an advertising campaign to let pensioners and other people know what they are entitled to? It is not good enough just to send out leaflets, although those are welcome. We need to ensure that pensioners will take up those income-related benefits.
On the details of the social security uprating, do the Government honestly believe that the existence of lone-parent benefits encourages marriages to break up, because that seems to be what the Secretary of State for Social Security is saying? Where is the evidence for that? Where is the evidence that it encourages people to leave their husbands and to set up as a lone-parent family?
Lone parents are rarely better off. The hon. Members for Wallasey (Ms Eagle) and for Peckham (Ms Harman), the Opposition spokeswoman, said that 40 per cent. of one-parent families have an income of less than £100. That compares with the fact that 4 per cent. of two-parent families have an income of less than £100.
In my intervention, I told the Secretary of State that the lone-parent premium was introduced in 1988 by this Government to recognise the extra costs of lone parents bringing up a child or children. I do not honestly believe that he answered the question why in 1988 there were extra costs, but why, this year or next year, there will be no extra costs for such parents. As the Secretary of State has admitted, the largest group of lone parents are divorced and separated women. They are not going to be encouraged to leave their husband just for these benefits.
The Secretary of State cannot honestly believe that a happy couple will split up, just so that the wife can receive the extra benefit of £5.20 a week or £6.30 a week. It is ludicrous, but that is what the Government are suggesting.

Mr. Bernard Jenkin: Will the hon. Lady explain and justify to a married couple on benefit why a single parent should effectively be better off than a married couple on benefit in identical circumstances?

Ms Lynne: The hon. Gentleman should have put that question to the Secretary of State for Social Security in 1988, when the lone-parent premium was introduced. The Government recognised the extra cost then. There are extra costs for lone parents bringing up a child. Everyone knows that. It is an established fact, or the Government, in their wisdom, would not have introduced the premium in 1988.
The Government have already admitted that 90 per cent. of lone parents want to work. We should be helping lone parents back into work. To do that, we need much more help with child care costs. With respect, the £60 disregard is not enough. It is paid only on family credit. It will not help many of those lone parents, for the simple reason that they cannot find child care at £60 a week.
I am appalled that the Government are abolishing the one-parent benefit. They talk about getting lone parents back into work. The benefit helps such parents in work and it is not cost-effective to abolish it.
I am concerned again that the Government have not uprated the social fund maternity payment in line with inflation. I am pleased that they have uprated child benefit, but we need to know what will happen. At the previous general election, they guaranteed that child benefit would be uprated year on year in line with inflation. I hope that, in her reply, the Economic Secretary to the Treasury will give an assurance that that will occur year on year from now on, and that that will be a strong general election commitment. It is important, because the Labour party has decided to scrap child benefit for 17 and 18-year-olds in education.
I am sorry that nothing has been done in the social security uprating to restore benefit for 16 to 17-year-olds. Many of those people are not in jobs and are not receiving benefit. More than 120,000 was the last count—the precise figure is 120,300. Do the Government know what has happened to those young people? I will tell them what has happened to some of them. Some are out on the street. Some have gone into prostitution. Some have gone into crime.
When that happens, there is a knock-on effect for this and every Government. There is a knock-on effect for the Home Office budget, because the crime figures and prostitution rise. There is also a knock-on effect for the Department of Health because, once they are homeless, people's health suffers. It is not cost-effective to cut benefit for 16 to 17-year-olds, as the Government have done. They should restore those benefits.
Many of those young people leave home because they cannot cope at home. I know about the provision that, if a young person has been abused, he can report it and could receive benefit, but many of those young people do not want to say that they have been either sexually or physically abused. They are too embarrassed to do so. They leave home, they cannot get employment and cannot receive benefit.
We need to ensure that those people have proper training places. The Government say that they can easily gain a training place, but the figures show that that is not


correct. There are not enough training places for young people. Many of them are not equipped to take up one of those places.
To get people back into work, we need a proper benefit transfer scheme to ensure that, if someone has been unemployed for more than a year, his benefit is given to an employer to take him on. The Government should consider that and I hope that they do so.
To return to pensioners, the cold-weather payment rules are strict. The temperature must be below zero for seven days. I should like that to be reduced to three days. Seven days is far too long and the wind-chill factor is not taken into account. I hope that all Conservative Members will support the modest Bill that the hon. Member for Preston (Mrs. Wise) is introducing as a private Member's Bill, which takes the wind-chill factor into account. I am privileged to be co-sponsoring that Bill.
On the Christmas bonus, there is not much there for pensioners. It has been frozen yet again at £10—a miserly amount for Christmas. If it had gone up in line with inflation since 1972, it would be worth £67. I want the Government to make a commitment that, in the first week of December, they will pay double the pension to those pensioners. At least the Government have not abolished the bonus, as the Labour party did when it was in power.

Sir Graham Bright: With your support.

Ms Lynne: Another hon. Member brought that up in another debate. If the hon. Gentleman considers the facts, he will find that there was no Lib-Lab pact when the bonus was abolished. He should consider the timing of it. After the previous debate, I looked it up and I wanted an opportunity to tell Conservative Members that they were wrong. The hon. Gentleman should check his facts before he makes seated interventions. Yes, the Labour party cancelled the bonus, but what have the Government done? They are miserly to pay pensioners £10 as a Christmas bonus. What can £10 buy? It would barely buy a frozen turkey.

Mr. Anthony Coombs: How much would you pay?

Ms Lynne: If the hon. Gentleman had been listening, he would know that I suggested that, in the first week of December, there should be a double pension for every household: a double single person's pension and a double couples' pension. He really must pay attention instead of making seated interventions when I have already told him the facts. At least the Government did not cancel the bonuses.
Turning to housing benefit, earlier this year the draconian rule was introduced for people under 25 whereby they had either to find accommodation in a multi-occupancy house or not receive housing benefit. That rule has now been extended to those under 60. I hope that the Government have done their research properly and determined whether sufficient bed-sit accommodation is available, because I know that there certainly is not enough such accommodation in Rochdale, and there is not enough in other areas.
Over the years, landlords have been persuaded by the Government to offer self-contained accommodation—which means with a bathroom and a kitchen included. What are landlords now supposed to do—rip out those facilities and put in shared bathrooms and kitchens so that they can get tenants? That is what will have to happen, because people will not be able to find that type of accommodation.
What about 55-year-olds who are thrown out of work and who have lived in a property all their lives, until they were made redundant? They had rented it—probably a one-bedroom flat, or perhaps a one or two-bedroom house—because they knew that they could afford it, and they could not find another job because they were too old. They took on that accommodation because they were able to afford it, but now they will be thrown out. They will be made homeless if they cannot find bed-sit accommodation. That is my fear. We shall see not only 16 and 17-year-olds and under 25-year-olds on the street; we shall see under-60s on the streets, and that will have an absolutely devastating effect on the country.
I can understand why the Secretary of State has changed the qualification rules on the jobseeker's allowance, so that people will have to be unemployed for seven instead of three days to qualify. However, he will have to appreciate the fact that—although we hope that a person who is newly out of work will try in the first week to find work, go for interviews, make those telephone calls and write those letters—they need extra money then, if we want to get them back into jobs quickly. It would be cost-effective to let them have that extra money then and not to extend the qualifying time to seven days.
To sum up, the Budget and social security uprating have done nothing for pensioners. It was an absolute insult that pensioners were not mentioned by the Government—although they have frozen the Christmas bonus. The Government have done a tremendous amount for single parents—they are destroying single parents' lives. They are also destroying the lives of single people under 60 who will be thrown out on the street.
It is a miserly Budget, and all that it will do for the Government in the short term—because it will not save money in the long term—is perhaps save them a bit of money. It will certainly not help the most vulnerable in society.

Mr. Bernard Jenkin: I am most grateful to have caught your eye this early in the debate, Mr. Deputy Speaker. I must apologise to the House in advance that I will not be able to stay for the conclusion of the debate, as I shall be attending to other duties, but I crave its indulgence.
I am most grateful to have the opportunity to follow, as I sometimes do, the hon. Member for Rochdale (Ms Lynne) in debates on social security. I should like briefly to make a comparison between her speech and that of the hon. Member for Peckham (Ms Harman). There seems to be a race between the two Opposition parties in which can promise the most, make the most spending commitments and produce the glossiest promises to try to seduce some of the most vulnerable electors in our constituencies to vote for them.
I have some news for both hon. Members: this is not a race in which Conservative Members intend to participate. If we did, not only would we be participating in a fraud


upon the electors—because the Opposition cannot possibly keep those promises—but we would be giving up the credibility that we possess and they lack on the fundamental issue at the heart of the Budget judgment: the levels of public expenditure, borrowing and taxation.

Ms Lynne: It is absolutely amazing that the hon. Gentleman says that he will not participate in the race to protect the most vulnerable in society. That is what he is saying: that those vulnerable people can be left at the bottom of the heap. If he would like to examine our alternative Budget, he will find a fully costed programme. We have said how we will raise money and how we will spend it.

Mr. Jenkin: I am very glad that I gave way to the hon. Lady, because it gives me an opportunity to clarify her misunderstanding of what I said. I said that we will not participate in the race to produce big and glossy promises that we know we would not be able to fulfil. The important aspect of the Government's promises on spending is that we not only make promises but we keep them.

Mr. Mike O'Brien: On credibility and promises, the hon. Gentleman, during the most recent general election, gave his constituents 10 good reasons to vote Conservative. Those were his promises. No. 4 in his personal election address was lower taxes. What price his promises and what price his credibility to his electorate now?

Mr. Jenkin: It is a basic tax rate that is now 23p—which is 10p lower than when the Labour party was last in office. I am most grateful to the hon. Gentleman for drawing attention to my promise to my electors, which we have been able to keep.
As I said, the key concern in the Budget was the level of public borrowing. There is no doubt that there is disappointment that borrowing has remained so stubbornly high. It is instructive, referring to paragraph 1.06 of the Red Book, to make a comparison between the projected borrowing figures in this year's and last year's Budgets. This year's outturn was meant to be 3 per cent. of GDP, and it is 3.5 per cent.; next year's was meant to be 2 per cent., and it is 2.5 per cent. We do not achieve balance until 2001.
Against that background, my right hon. and learned Friend the Chancellor of the Exchequer had a most difficult Budget judgment to deliver, and I congratulate him on what he has achieved. The higher borrowing is due to sluggish tax rates. Therefore, I utterly applaud his initiatives to do his best to collect taxes that people are due to pay. The spend-and-save initiative aims to improve the Government's efficiency, not only in reducing social security fraud—which is possibly the main thrust of this debate—but in improving the efficiency of Customs and Excise and the Inland Revenue, to ensure that businesses and individuals pay the taxes that they are due to pay.
The Budget was also delivered against the background of an extremely successful economy. We have only to look at the key outputs. We are in our fifth successive year of growth. The graphs show that industrial investment is rising above its trend levels. There is also good news about jobs. It is ridiculous for the Opposition to pretend

that the economy is somehow on its uppers and that 17 years of Conservative Government have been wasted when unemployment in the United Kingdom has fallen by more than 1 million in the past few years, while our European competitors who have not dealt with their structural and other difficulties are still experiencing sharp rises in unemployment. The fact is that unemployment in the United Kingdom is 7.5 per cent. when it is more than 11 per cent. in France and more than 25 per cent. in Spain.
If the Government deliver one pledge to the electorate it is that people should have the best possible opportunity to get a job. When I intervened in the speech of the hon. Member for Peckham and asked her to produce evidence that a minimum wage would not destroy jobs, she was completely unable to do so. The right hon. Member for Kingston upon Hull, East (Mr. Prescott) has also admitted that the introduction of a national minimum wage would destroy jobs. How would that help the most vulnerable people in society? How can people make the transition from welfare dependency into work if we create an even higher barrier for them to surmount?

Mr. Alan Howarth: If the hon. Gentleman is interested in studying the academic evidence that demonstrates that a minimum wage, sensibly conceived, not only would not destroy jobs, but would enhance job creation, may I refer him to the work of Professor Card of Princeton university.

Mr. Jenkin: I have not studied that particular piece of evidence, but I refer the hon. Gentleman to the OECD surveys on the national minimum wage that are absolutely clear that a minimum wage would cost jobs. Closer inspection of the operation of the minimum wage in countries that Opposition Members describe as exemplary reveals that the relevant legislation is often either ineffective or so decentralised that it does not constitute a national minimum wage. The only concrete example is France, where unemployment is high.
I particularly welcome the following comment in my right hon. and learned Friend's Budget speech:
I realise that the current system of business rates bears particularly hard on smaller businesses, for which it represents a much bigger proportion of total costs compared with their large competitors."—[Official Report, 26 November 1996; Vol. 286, c. 169.]
He pledged to address that inequality in his next Budget, and I very much look forward to that.
That comment reflects the work that I carried out in the summer along with my colleagues on the Conservative Back Bench committee on smaller businesses to produce a pamphlet entitled "Fairer Business Rates". It showed that the distribution of business rates lent heavily on smaller businesses and represented a far higher proportion of their overall costs. Businesses with a turnover of between £50,000 and £100,000 were paying business rates of up to 14 per cent. of their overheads, whereas larger companies were paying only 2 or 3 per cent. It is therefore not surprising that shops and smaller high street businesses are struggling to compete with out-of-town supermarkets, which pay only a tiny proportion of overall costs in business rates. I very much welcome my right hon. and learned Friend's promise to address that problem. I appreciate that a radical redistribution of the business rate burden may be required so that larger businesses pay just a little more in order to provide relief for the thousands of small businesses that have made representations to us.
I welcome the increase in key programmes that reflect our priorities. My local health authority will receive a 2.6 per cent. rise in its budget in real terms, lifting North Essex health authority expenditure to £370 million. That above-average increase reflects the continuing trend of redistribution of health resources according to capitation funding, redressing an imbalance in funding towards conurbations, particularly London.
I am grateful for the increase in funding for schools. We hope that local authorities—particularly in Essex, which is not under Conservative control—pass that increase on to the schools that need the money. I am also pleased that an extra £280 million has been allocated to higher education. It represents a much-needed cash injection for the hard-pressed universities that are eagerly awaiting the outcome of the Dearing review on higher education funding. I hope that the system will be restructured to enable substantial growth in higher education funding in future. We all know that the rise in the number of students has not been matched by increases in resources to universities. Perhaps a move to genuine capitation funding for higher education would be beneficial.
Finally, the police will receive a 3.7 per cent. increase in funding, providing 2,000 more officers in England and Wales against the background of a 10 per. cent reduction in crime over the past three years. I am particularly pleased that the Essex police force will receive a 3.9 per cent. increase in spending power and an extra 55 officers.
The spending priorities of the Opposition parties are revealed all too dramatically by their major complaints about the Budget. It is clear that they are most worried about their friends in local government. If they were seriously concerned that local government might be underfunded, they would vote against the tax cuts that we are giving the British people rather than suggesting that expenditure should be reallocated—away from the police, education or the health service—in order to support local government. The Opposition should see the mote in their own eye before criticising the Government's efforts to streamline the national health service. They always say that we should get rid of administrators in the NHS, but never complain about the number of administrators in the town halls—there are often far too many of them.
No doubt the Liberal Democrats are planning a 1p increase in the basic rate of tax in order to fund their education promises. I hope that the hon. Member for Rochdale will have noticed that schools are getting extra money and the British people are getting a penny off the basic rate of tax. The Conservative Government can provide such double benefits time and again.

Ms Lynne: The hon. Gentleman must appreciate that the council tax payer will have to pay for the Government's education commitments. Liberal Democrats will vote against the reduction in income tax as we believe the money should go into education and training. I wish that the official Opposition would join us in the Lobby.

Mr. Jenkin: I certainly agree with the hon. Lady that it would be a good deal more honest for the official Opposition to do as she suggests.
The underlying concern of the Budget must be the rise in monetary growth. My right hon. and learned Friend said very little about monetary policy and did not refer to

the key economic indicators of M4 and M0. The Red Book informs us that those monetary indicators are outside the monitoring range.
I shall draw attention to the strong correlation between money supply indicators and future inflationary pressure. The Library has kindly produced a graph showing M4, M0 and inflation over the past 20 years. It is striking how the peaks in monetary growth precede the peaks in inflation.
I draw particular attention to a comment made by Professor Tim Congdon, one of the wise men, the day after my right hon. and learned Friend delivered his Budget. The advice sent to his gilts clients was headed:
Mr. Clarke silent on high money growth. Cautious fiscal stance disguises monetary laxity.
I am acutely aware of Professor Congdon's unnerving credibility for forecasting inflation. He wrote an article in June 1987, long before most people were worried about the overheating of the British economy, called, "Mr. Lawson's secret inflation". In it he said:
The growth of credit and money is too high, the economy is expanding too quickly and interest rates are too low to prevent the return of inflationary pressures.
I do not for a moment suggest that we are approaching any such difficulties in the economy, but it is clear that Professor Congdon is sending out warning signals and that his feelings are shared by others. The "Economic Viewpoint" written by Samuel Brittan in the Financial Times—no anti-single currency monetarist he—says:
there are many signs of inflationary pressures in the pipeline.
Those pressures may not be showing up in the more solid leading indicators yet, but we must be ever vigilant of the dangers of returning to inflation.
I therefore very much welcome the report in The Times today that my right hon. and learned Friend the Chancellor
pledged to raise interest rates if necessary".
He said:
I will do whatever is necessary, but we have at the moment a lack of inflationary pressures. As soon as they show signs of growing, I will act.
It is commendable that my right hon. and learned Friend is keeping a firm eye on inflation to ensure that there is no danger of returning to boom and bust.
As my right hon. Friend the Member for Worthing (Sir T. Higgins) said, the Budget judgment is fundamental to the character and purpose of the House. As we look to the future, we must hope and pray that the Government will stick to their pledges—as I am sure that they will—that there will be no fudging of the Maastricht convergence criteria. If they do so, there is no prospect that that role will be stolen from us.

Ms Angela Eagle: It was nice to hear the hon. Member for Colchester, North (Mr. Jenkin) espousing the old creed of unalloyed monetarism, quoting M0, M4 and other similar numbers and measures of the money supply. We do not often hear the old faith quoted in here. Of course, it is as wrong now as it was when it was first adopted, as any look at the effectiveness of monetary policy in the early 1980s demonstrates.
The income tax reductions in the Budget are offset by indirect tax increases. The Budget gives with one hand and takes back with the other. We have one new tax—


VAT at 17.5 per cent. on some insurance—and seven tax increases: council taxes going up by £4 billion; insurance premium tax up by 1.5 per cent.; a doubling of air passenger tax; the abolition of tax relief on profit-related pay, which threatens some serious reductions in income when it comes into effect—which, mercifully for the Government, will be after the general election; prescription charges up by 15p; fuel duties up by 5 per cent. above inflation; and tobacco duties up by 3 per cent. above inflation. Conservative spending commitments dissolve before our eyes when we look at the details.
However, I praise the Chancellor for having done something that I have found useful—releasing the Budget details on floppy disk so that we can put them into our computers and have them readily accessible. That is a good innovation. I hope that there will be a CD-ROM with fanfares, trumpets and sound effects at some stage in the future. Releasing the information on disk is a good start and I hope that we shall pursue it. I hope that that innovation was not responsible for the leaking of the Budget. I suspect that it was the privatisation of Her Majesty's Stationery Office, but time will tell where the leaks came from, when MI5 has done its job.
The spending commitments in the Red Book and the accompanying press releases are phantom. The Government claim a £1.6 billion increase for the NHS, but a 0.7 per cent. real-terms cut in the resources allocated to the health service is forecast for the year after the election. The 16 per cent. cut in capital expenditure has not been replaced by private finance initiative commitments. We have heard today that only one of the PFI commitments promised at the last election has been delivered in the past year.
The Government claim an increase of £875 million in the resources available for education, but if the Government's total spending figure was applied, £73 million less would be available for education than is currently spent. That is yet another phantom spending commitment.
Most of the £450 million claimed as extra spending to tackle crime will go on building new prison places, not on preventing crime. We need to go to the causes of crime to prevent it, rather than spending ever-increasing amounts on building prisons all over the country. We need to deal with the problems of social breakdown caused by inequality and poverty, which are the legacy of the Government.
The Budget is already unravelling. There is scepticism on where many of the revenue claims will come from in reality. The spend and save plan is causing commentators particular problems and there is outrage at some of the more blatant examples of what might generously be called creative accounting which are coming to light as we take a more careful trawl through the complex series of documents released on Budget day.
Various comments have been made by economists in the past couple of days. Adam Cole of the City brokers James Capel said:
I am staggered by it. It incorporates fiddles which would make the French blush.
The £7 billion savings from loopholes and avoidance are especially disbelieved. David Mackie from the investment bank J. P. Morgan said:
This is the kind of thing the Italians put in their Budgets. It is not at all clear that the plans on paper can ever be delivered.

Economists have been particularly outraged by a convenient but unhighlighted change in the conventions for presenting spending plans to the House which has allowed the Treasury to claim that the control total will be £2 billion lower than would have been the case without the change. That has been achieved by subtracting the receipts from the sale of the student loan book and the privatisation of the Ministry of Defence housing stock from departmental spending totals rather than entering the revenue as a privatisation receipt, as has been the case in the past. If those factors are added back in, departmental spending plans are £3 billion higher than the Budget documents claim. That means that we do not have as tight a public expenditure round as the Chancellor claimed. It is looser.
The Treasury also incorporates assumptions about falling unemployment benefit spending, which it has never done before. The Government have made a big assumption about the numbers due to come off unemployment benefit, allowing them to deduct several hundred million pounds more from their spending plans.
A windfall tax, by another name, has been introduced. We spent an entire day debating the Opposition's plans for a one-off windfall profits levy on the privatised utilities, but a closer look at the Budget documents reveal that the Chancellor has imposed his own version of it in his changes to capital allowances for infrastructure and pipes. The Opposition are proposing a one-off levy, but the Chancellor has introduced a continuing and cumulative levy, which the utilities calculate will cost as much as Labour's £5 billion receipts from the windfall tax.
There is much sleight of hand in the Budget. There are many claims and much crossing of fingers, whistling in the dark and hoping that the £7 billion savings will accumulate. The Government do not believe that they will be in power after the next election, so they are not really interested in how to get out of the mess next year.

Sir Terence Higgins: The hon. Lady says that the proposed windfall tax is a one-off. Could she direct me to a specific assurance on that from a senior Opposition spokesman? On the point that she made in her intervention on my speech, is she not hoping that there will be excess profits so that the Labour party can tax them? That would lead to higher prices, which consumers would have to pay. She said in particular that shareholders would be taxed. If she wants to tax them, she should say clearly that it will be a shareholders' tax, and not try to achieve it by a windfall tax.

Ms Eagle: The precedent for a windfall tax was set by the Conservative party, which imposed it on the banks. It is absolutely certain that what the Chancellor is proposing for capital allowances will be cumulative and on-going.

Mr. Bernard Jenkin: Will the hon. Lady give way?

Ms Eagle: No, because I have a limited amount of time. The hon. Gentleman's speech took nearly 20 minutes.
I want to talk about the Budget's effect on women. In 1995, the Government signed up to the Platform for Action at the fourth world conference on women in Beijing. Much of what they signed up to was directly


contradicted by their actions in the Budget. Sadly, they have done it again this year. One of the things hoped at the conference was that there would be gender assessment of Budgets and other Government policies to enable us to look more closely at the differential effects of them on men and women. It is impossible to assess the direct impact on women because the Government have failed to publish such a gender impact study and—

Mr. Geoffrey Clifton-Brown: Will the hon. Lady give way?

Ms Eagle: No, I do not have much time left and want to carry on.
Australia, Canada and South Africa all publish such studies. Why does not the United Kingdom? Such studies are an essential initial tool in the struggle to analyse the differential impact of fiscal policy and the structure of the benefits system on men and women. At the moment, there is a myth in the Treasury that there is an equal effect on people regardless of gender. Of course, that is not true; it is complete nonsense, as the Fawcett Society and the Women's Budget group continue to point out.
Although it was nice that the Chancellor mentioned women in his 75-minute Budget speech, there was only one such mention, and that was to announce a petty and vindictive measure that will drive close to 1 million women of working age further into poverty.

Mr. Clifton-Brown: Will the hon. Lady give way?

Ms Eagle: No, I am not giving way.
The freezing and the subsequent abolition of allowances for lone parents picks them out as this Budget's scapegoat, as they were last year. The plan to phase out the lone-parent premium, which is worth £5.20 a week, and lone-parent child benefit, which would be worth £6.30 a week by 1998, hits hardest the poorest members of society who are of working age.

Lady Olga Maitland: Will the hon. Lady give way?

Ms Eagle: No, I will not give way.
The abolition of the allowances saves a mere £290 million a year, yet, as the Women's Budget group pointed out, the percentage of lone parents living in poverty has risen from 19 per cent. in 1979 to 59 per cent. today.
It is a myth that there are no extra costs to bringing up children alone. We all know that there are. As the hon. Member for Rochdale (Ms Lynne) said, the Government's Green Paper on reform of social security in 1985 stated that one-parent benefit would continue
as a contribution to the additional costs faced by lone parents in bringing up children alone.
Those additional costs have not disappeared, and there are many more women bringing up children alone today than there were when that Green Paper was published. The Government simply have not done nearly enough to help lone parents. Instead, they have punished them in two Budgets on the trot and given no justification for driving them into serious hardship.
The average weekly income of a one-parent family is £134, which is 38 per cent. of that of a two-parent family, which stands at £340 per week. Why on earth did the Government in the Budget take away the small amount of help that has allowed many women to stay above the bread line? It is particularly insulting that the Chancellor chose to present the punitive measure as an equalisation measure. In fact, it was a quite unprecedented attack on many women who are doing their best to raise children in very difficult circumstances.
We should remember when we consider such punitive measures that driving single parents into ever more extreme poverty merely impoverishes the next generation. Many of our children are living in poor conditions and are having to try to grow up in them. The Government argue that current benefit arrangements encourage family breakdown. That is absurd and insulting. Why should we punish today's children? We must do our best to support them and ensure that they turn into decent, productive members of our society, which I am glad to say the vast majority of them do.
Very few of the 1.6 million lone-parent families match the caricature of the teenage, unmarried mother that the Conservative party insists on touting. The vast majority of lone women did not start out that way and never intended to end up that way. They are divorced, abandoned or widowed, and it is our duty in this House when we consider Budget measures to think very carefully about the message that we are sending to those women. We should think about the fact that we are willing, as a House of Commons, where so far only 9 per cent. of Members are women, to drive lone women into ever more serious poverty.
We must help lone parents by allowing them to work. That means providing affordable, high-quality child care, a policy which will quickly pay for itself. It means training and education to equip them for the labour market. Many women have been away a long time from the labour market and need to be reintroduced to it in a sensible and practical way. Helping them means welfare-to-work measures to encourage them to go out to work. Yet, what is in the Budget—a £56 million cut in the nursery education budget, a £34 million cut in the training and enterprise councils' training budget and a £20 million cut in capital spending on higher education?
The Budget is not a Budget for women; it is not a Budget for children or the poor; it is not a Budget for fairness; it is not a Budget to prepare this country for the future; it is a last-gasp Budget of a bankrupt Government.

Mr. David Evennett: I am very pleased to be able to participate in this part of the Budget debate. I do not want to follow the negativism of the hon. Member for Wallasey (Ms Eagle), whose speech was very like that of her hon. Friend the Member for Peckham (Ms Harman)—a lot of waffle but not a lot of distinct, definite and different policies. Nor do I want to follow the hon. Member for Rochdale (Ms Lynne), who is about to leave the Chamber, although to her credit she did want to spend, spend, spend and she put forward some policies. Unfortunately, we on the Conservative Benches could not support them because they would involve increasing taxation.

Mr. James Cran: She was honest.

Mr. Evennett: At least, as my hon. Friend says, she was honest, unlike the Opposition, who have not been honest in the course of debate this week about what they would do. There has been much rhetoric and waffle but not many costed policies, ideas or definite proposals. I know that the electorate will take that into account when they make their judgment.
The Budget is one that I strongly support and endorse and it will be warmly welcomed in my borough of Bexley. It is a Budget for prosperity and, in particular, the long-term prosperity of people in London and across the rest of the country. It is a moderate and balanced Budget, in both fiscal and monetary terms, and I welcome that. The fact that the Government are back to a tax-cutting agenda will be received as good news across the country. The majority of people in my constituency, and in the constituencies of my hon. Friends, want lower taxes. They know that Labour—should a Labour Government be elected, which we do not believe will happen—will be a high-taxing party. It always puts up taxes when in government. It believes in higher public expenditure and higher taxation.
People in my constituency work hard, pay their taxes and save for the future and they would not trust Labour in power. They share the Conservative agenda that was reaffirmed by my right hon. and learned Friend the Chancellor of the Exchequer on Tuesday afternoon. They know only too well that the Government have no money of their own, only what they take from taxing those who work or who have savings invested. Of course, the people want good public services. We are all in politics to provide good public services for all our citizens. We want a good education system, a good national health service and an effective and well-equipped police force.
My constituents will be delighted, therefore, by the increased expenditure that the Chancellor announced, especially the real increase in resources for the NHS. They want more money to pay for medical treatment for those in need. They want good health provision, free at the point of delivery. The Government have delivered on the health service. The Government have pledged more money every year above the rate of inflation and they have delivered that. They propose, over the next five years, to continue to increase resources for the NHS.
What do the Opposition say? They say nothing. They do not match our commitment, nor do they come up with any other figures for what they would spend on the NHS. My hon. Friends and, I believe, the majority of people welcome the Government's spending priorities. They will also approve the reduction of 1p in the basic rate of income tax to 23p and will strongly support the increase in personal allowances that my right hon. and learned Friend unveiled on Tuesday afternoon.
I wish to record my thanks to the Chancellor for listening to the many representations from my hon. Friends about increasing the married couple's allowance by the level of inflation. At long last, our party, which has always been the party of the family, has made a start in redressing the way in which the tax and benefit system has discriminated against married people with children. The increase is a small step, but it is in the right direction and will be welcomed. We look forward to the next Conservative Budget in a year's time when perhaps more will be done on that front.
Before my comments on the benefit system, I wish to endorse what my hon. Friend the Member for Colchester, North (Mr. Jenkin) said about inflation. Inflation is a great

evil. It destroys people's savings and it destroys jobs. We must be tough on inflation and my right hon. and learned Friend endorsed that in his Budget. We know that there are inflationary pressures in the system, as my hon. Friend mentioned, and I welcome my right hon. and learned Friend the Chancellor saying that he will take whatever measures are necessary and prudent to ensure that we do not return, ever again under a Conservative Government, to high inflation.
I welcome what my right hon. Friend the Secretary of State for Social Security said this afternoon about the benefit system and its place in public expenditure. In the country, and certainly in my constituency, there is much unhappiness and disquiet about the benefit system. The perception is that it is unfair. Does the money go to those really in need? Is the huge benefits bill of £93 billion too much? Can we afford it? Should we he spending that much money on benefits? How is it that hard-working people in my constituency and elsewhere are often no better off by being in work than many who do not work?
We have falling unemployment levels nationally and locally in London. In particular, unemployment has fallen by more than 20 per cent. in Erith and Crayford since the last general election and by 34 per cent. in the neighbouring constituency of Bexleyheath. That is a real achievement. It is very welcome to see people getting back into jobs, because that is what we passionately and desperately want. We want well-trained workers who are able to take new jobs when they unfortunately lose their old jobs. Why then does the social security budget continue to rise? That is the question that my constituents ask when they raise their serious concerns about the social security budget with me.
I wish to put on record my praise and strong support for my right hon. Friend the Secretary of State for Social Security for the reforms of the past few years. In particular, I support his crackdown on waste and fraud in the benefit system. My constituents welcome that approach and they also welcome the measures that are proposed for further improvements in the system. Those improvements will not only crack down on fraud and abuse, but will make the system more efficient and effective, so that it provides, for those who need the benefit system, a first-rate service.
We welcome too the reduction in the overall growth of social security expenditure. It will be 1½ per cent. instead of around the 4 per cent. it would have been if my right hon. Friend the Secretary of State had not imposed his reforms. Therefore, we have a social security budget that is targeted on those in real need and that is doing the job that it was set up to do. The Opposition seem only to want to spend more and more money and to distribute benefits universally, rather than targeting them. We Conservatives passionately believe in targeting.
Labour does not really have a policy on benefits, just as it does not have a policy on tax or public expenditure. If it does have any policies, we look forward to the hon. Member for North Warwickshire (Mr. O'Brien), when he winds up, giving us some information about what he and his party will do. His party is negative and critical and it will not put flesh on the bones of its policies. The electorate will not be fooled and, when the election comes, they will look carefully at what the Government have done on tax and benefits and what the Opposition


say they might do. I think that they will vote for the policies that have been so well thought through and implemented.

Mr. Mike O'Brien: rose—

Mr. Evennett: Ah, the hon. Gentleman is going to give us some information.

Mr. O'Brien: It is annoying me that the hon. Gentleman says that we have policies to spend lots of money and also says that we have no policies. That sort of argument is intellectually idle. If he can say what he is charging us with, I can answer him.

Mr. Evennett: The hon. Gentleman has fallen straight into the trap. The Opposition say that of course they will spend more, because we are not spending enough on health, education or whatever, but on the other hand they say that they will make no spending commitments. He has answered his question, because he has not given us the answers. He is riding two horses in different directions and hoping that the electorate will not notice. I notice that the hon. Gentleman is grinning—

Sir Terence Higgins: For the cameras.

Mr. Evennett: The television cameras should perhaps show the hon. Gentleman. He knows that he cannot ride two horses, as do all the Opposition Front Benchers. They cannot and will not get away with that because the electorate will see through it.
I strongly support the commitment by my right hon. Friend the Secretary of State for Social Security to improve the social security system and to ensure that the Government's commitments—to pensioners and the people in need, who need benefits—are kept.
We believe in the uprating of pensions and in increasing benefits for those who are really in need, and the taxation and benefit policies that the Government have set out will be beneficial to those in real need. The jobseeker's allowance has been necessary, and it is effective. The housing and council tax benefit reforms proposed will mean more effective use of the money that is available to spend on the system.
Many people who come to my constituency surgeries need benefits but do not get them. Yet we know that many people work in the black economy and get benefit when they should not. The reforms are part of a comprehensive package to make the system more efficient and effective, so that it targets those in need.
I was amazed by the statistics given by the Department of Social Security, which show that 300,000 more people were receiving housing benefit in 1995 than were receiving it in 1991. I strongly question that staggering figure.
I believe that the benefit and tax systems that the Budget and the public expenditure round are producing are good. I have always believed that tax and benefits should help married people rather than discriminate against them. Of course, no Conservative Member wants

people in real want not to get the benefits that they need, or the training that they need to get back into employment and become part of a working society.
I believe that when they lose their jobs, most people, including most people with young families, want to get back to work. Of course they do, and we must help them. What we have heard this week represents a move towards helping them even more.
There must be a fair and reasonable Budget and public expenditure round. I believe—and in the spring the electorate will endorse my belief—that we have a credible economic policy, a distinctive policy that has been successful. The Opposition do not like success, because it stops them trailing round misery and failure, as they like to do.
We now have an effective and efficient benefit system to help those in need, simplification of the administration of the system, and lower taxes. That is the way forward, the way that this country needs to go to maintain economic prosperity, and the way that the people of this country want us to go. I strongly commend the Budget.

Mrs. Maria Fyfe: I have been listening carefully to the contributions by Conservative Members, and much of what they have said has had no relevance whatever to social security upratings. In the few relevant comments that they have made they merely complained about the cost. We have heard the ritual expressions of sympathy with people in need, yet there is a total refusal to accept the fact that the decisions being made by the Government are throwing people who are already poor into greater poverty.
The hon. Member for Luton, South (Sir G. Bright) talked about respiratory problems. I agree that some such problems are related to transport in our cities, but the hon. Gentleman failed to mention that many children suffer respiratory problems because they live in housing that is damp and cold, and their parents do not have enough money to heat it.
The Secretary of State said that the new measures would save £6 billion. I would like to know how much of that money will be taken from the purses of single mothers—or more accurately, from the mouths of their children. There are 1.5 million lone-parent families in Great Britain, and 47 per cent. of them live on less than £100 per week, which only 4 per cent. of married couples have to do.
That statistic answers a point that has been made by several Conservative Members. Only 4 per cent. of married couples have to live on such a low income. Of course those people should be assisted, but that is no reason for failing to help the 47 per cent. of lone-parent families who live on less than £100 a week.
We know that 71 per cent. of lone mothers are dependent on benefits, and that six out of 10 children in lone-parent families are being brought up in poverty. One-parent families account for almost one quarter of all families in Scotland. The average weekly income of one-parent families is only 36 per cent.—not much more than one third—of the average income of two-parent families.
In Scotland, 75 per cent. of lone parents claim income support, and 38 per cent of children—440,000 of them—live below the poverty line. Yet the Government are now making an already bad situation worse for such families.
Only 41 per cent. of lone mothers in Britain work, and in Scotland the figure is only 30 per cent. It has already been pointed out that in France the figure is 82 per cent., and in Sweden 70 per cent. The Secretary of State said that that was because of recent big increases in the number of lone parents in Britain, which meant that younger children were involved. However, he did not respond to my hon. Friend the Member for Peckham (Ms Harman) when she pointed out that the figures showed that there were jobs in France for lone parents to take.
Surveys have shown that 90 per cent. of lone mothers want to work, but they need ways in which to move off benefit and into work, not punishment for being on benefit.

Lady Olga Maitland: Will the hon. Lady give way?

Mrs. Fyfe: No, I will not. If the hon. Lady's hon. Friends had not gone on at such great length making irrelevant speeches that had nothing to do with social security, I would have given way. But my time is limited and I intend to say what I have to say. If, and only if, I have time at the end of my speech I shall give way.
Single mothers need not punishment but help to get off benefits and into work. Yet the Government are making it harder for them to do that. For example, they have cut local authorities' budgets and made it harder for them to provide child care through voluntary schemes and other such projects with local authority and urban aid funding.
The Secretary of State said that it would be unfair to pay extra benefits to lone parents because the only extra expenses that they had were the costs of child care. That comment could come only from a comfortably-off Member of Parliament who is male and does not know much about running a household or looking after children.
I wonder whether the right hon. Gentleman has any idea of what it is like to live on a low income—for example, when two or more children need shoes, but the parent has to spread her budget so thinly that she has only enough money to buy one pair of shoes at a time. Does he know what it is like to have to traipse in the wind and rain with children perhaps with a pram or pushchair to the shops with the lowest prices?
In general, Members of Parliament escape their fair share of family responsibilities. That is a bad enough state of affairs even when the family has the good income that Members of Parliament receive. But when a family consists of one parent living on an extremely low income, that parent has all the responsibility on her shoulders. Conservative Members show no sympathy for or understanding of the kind of problems that those people face.
The Secretary of State talked about the introduction of help with child care costs through family credit. However, as One Parent Families Scotland has pointed out, that help—an earnings disregard of £42 a week for single parents who work—has failed. Fewer than 2 per cent. of lone parents have taken it up to help them to return to work.
That is not because lone parents are workshy, but because of the severe limitations that affect the usefulness of the disregard. If the family is on maximum family credit the disregard does not apply, only one child counts, and it stops when the child is 11. The scheme has helped only a fraction of those whom the Government claimed that it would help.
We are supposed to be discussing social security cuts tonight, although Conservative Members have talked about every Budget-related subject under the sun except that subject. One-parent benefit, which is worth £6.30 a week, and lone-parent premium, which is worth £5.20 a week, are to be cut.
There will also be a cut in the child allowances paid with means-tested benefits, because the increases due when children reach 11 and 16 years of age will not now be paid until the September following the child's birthday. That is another mean little cut.
We have already discussed the housing benefit cuts. In addition to all the other cuts, the Child Support Agency benefit penalty for non-co-operation has now risen to £19.16 a week. Moreover, it will last for three years and will be renewable.
Such cuts will lead to a massive reduction in the income available to spend on food for children. Earlier today the House discussed the outbreak of a strain of E. coli in Lanarkshire. Poverty is relevant to that matter, because when a family has an extremely low income any money spent on food has to be stretched thinly. It is more of a disaster if one is on a low income to be told that some of the food one has bought is unusable. Yet nothing is being done to help those people overcome that problem. A mother has told me that she lived on nothing but bread, margarine and tea for a weekend last winter to ensure that her children were adequately fed, and I can only imagine that that mother's current winter will be worse.
Lone parents are being attacked for being lone parents, but the Government cannot starve women back into failed marriages. No one will break up a happy marriage for the delights of living on the lone parent benefit, but if a marriage is at an end and it is impossible for the couple to continue, the Government will not succeed in starving them back into it. This policy is supposedly about sustaining families, but the Government seem to be trying to force women back into marriages that should be broken up. Lone parents are as dedicated as two parents to creating a warm, loving and morally responsible home, and are no worse and no better than married parents in that respect. They vary, and most of them are extremely capable and worthwhile mothers. But they carry a double responsibility, and that is why these benefits ought to help them.
Thankfully, the Government are going, and going soon. The right hon. Member for Worthing (Sir T. Higgins) referred earlier to his "final, final, final" speeches, and compared himself to Frank Sinatra. Let me remind him that a popular hit of Frank Sinatra refers to "the final curtain", and that is what is coming down on this Government. The next Parliament will include more women Members of Parliament—largely on the Labour side—who will have experience of motherhood and of lone motherhood. When that happens, decisions made in this House are likely to be saner.

Mr. James Cran: Before referring to the details of the Budget, I wish to say—in as non-partisan a way as I can—that I was rather disappointed by the speech of the hon. Member for Peckham (Ms Harman). I am not complaining about the fact that she made a vigorous speech, which she did, because the differences between the Opposition and the Government are sharp on the


subject of social security, but she presented us with one of the most exaggerated cases that I have heard for a long time. I jotted down some of her words and phrases, such as "fractured society" and "breadline". She suggested that the Secretary of State is in the pocket of somebody. Many of us will look carefully at Hansard tomorrow to study that particular allegation, and the exaggeration of her case did not elevate her contribution to the debate in any way.
I strongly support the Budget, as I did last year's Budget. I was correct to do so then, Mr. Deputy Speaker, was I not? There were no giveaways in the Budget, despite all the speculation beforehand—particularly by the Opposition. It was a sensible Budget. There were tax cuts, but in no way, shape or form were they excessive. There were cuts in public spending and, my goodness, we needed them. We need more of them and, following this Budget, we will get them; but at the same time there was more money for the priority services such as the NHS, education and crime, as my hon. Friends—particularly my hon. Friend the Member for Erith and Crayford (Mr. Evennett)—have already mentioned.
All this, and inflation is under control. For me, that is a winning combination. This is the fifth year of economic growth, as was recognised by Opposition Members on Budget day. Opposition Back Benchers sat there with poker faces all afternoon. We heard nothing at all from them. That suggested a great deal. It would be expected that I would not think much of the speech of the Leader of the Opposition, but I have to say that it was very vigorous. However, the Leader of the Liberal Democrats, the right hon. Member for Yeovil (Mr. Ashdown)—who, presumably, is more impartial than me—called it an "attacking speech without content." That was absolutely right.
The Labour party is touchy and evasive about details, as my hon. Friends have exposed precisely this evening. In fact, Labour has no details of its economic policy. We were told that we would get the details of Labour's spending plans just after the Budget. Now, I understand that that announcement has been postponed until January next year. I venture to suggest that we will hear nothing about what Labour would spend in the unlikely event of its getting into government. An economic health warning is needed on the front of Labour's economic policy, and the electorate must beware.
The electorate are clearly alarmed already. I received a letter from the chief executive of Yorkshire Electricity, Malcolm Chatwin, on the windfall tax, about which we have heard one or two rather facile observations from Opposition Members. Opposition Members obviously have not received a similar letter—or are they just not quoting from it? Mr. Chatwin said that, for his company, the windfall tax would
undermine our ability to sustain the current level of investment",
which seems very serious to me,
increase prices to our customers in the longer term … reduce the dividend income for our shareholders"—
but the Opposition do not mind that—and
reduce pensioners' income as many of our large shareholders are pension funds.
That is a fairly major privatised utility telling us what would happen if we were to have a windfall tax.
Industrialists are not the only ones who are concerned. A number of my constituents have sent me Inland Revenue leaflet FAI 1979. I was sent it because leopards do not change their spots; Labour Members are taxers by nature and, just as they did it before, they will do it again. The leaflet sets out the 12 tax bands that the last Labour Government used to leach money out of other people's pockets—25 per cent., 30 per cent., 33 per cent., 40 per cent., 45 per cent., 50 per cent., 55 per cent., 60 per cent., 65 per cent., 70 per cent., 75 per cent. and 83 per cent. If Labour regains power, it will have as many different bands as it can get into the system to get as much money as possible out of electors' pockets. Frankly, Labour cannot help it.
On the back of the leaflet is the Labour party's old friend, the investment income surcharge. The Opposition do not like investment income—they did not then and they do not now. At that time, there was a 15 per cent. surcharge, and I would bet a lot of money—and I am a canny Scotsman—that that will be repeated next time, if there is a next time. An industrialist from Yorkshire Electricity and many of my constituents are becoming alarmed.
The Chancellor's decisions delighted me, as they did last year. First, I welcome—as did my hon. Friend the Member for Erith and Crayford—the 1p cut in the standard rate. It was not meant to be dramatic; it is a stage in the plan to reduce the rate to 20p in the pound. If I had my way, it would be somewhat lower. My right hon. and learned Friend was correct not to go the whole way and reduce tax by 2p, and he was absolutely correct to raise personal allowances and to widen the 20p band. He was also right to raise the threshold for 40 per cent. taxpayers—a much-misunderstood bunch of people who are currently being pursued by the Inland Revenue for more revenue.
I am also pleased about the movement on inheritance tax. It is, as I said last year, a shameful tax. Every year, the capital earned interest, it paid tax, and then the Chancellor gets the last cut out of it when the individual dies. I have never understood it, and I am delighted that the Prime Minister made the commitment that he did. It would be niggardly of me to say that I did not think that the Chancellor moved far enough this year; I must be grateful that there has been a considerable move over two years.
There are two prerequisites to cutting tax. The first is that a Government should spend less. In my view, all Governments spend too much, although Labour Governments spend a great deal more than Conservative ones. They try to do everything, and bend to every demand so that spending programmes grow like Topsy. That said, the Government must be commended not only for what they have done up to now to cut public expenditure, but for their commitment to cut it by £7 billion over the next three years.
I believe that it was my right hon. Friend the Chief Secretary who said on television about a year ago that public expenditure should be 40 per cent. or less of national income. That warmed my heart, and I was absolutely delighted to hear the Chancellor recommitting the Government to that aim. My right hon. Friend will understand when I say, "More effort, please" on the spending front. I dislike extending the tax base, because it merely encourages spending Ministers; with more money


around, we get more public expenditure. I therefore say to my right hon. Friend, "Eight out of 10 up to now, but could do better."
The second prerequisite is control of borrowing. The trend has been downward for the past three years, and it has halved as a proportion of gross domestic product, but it will still be £26.5 billion this year and £19 billion next year. I cannot wait for the year 1999–2000 when, I am delighted to say, we will be in balance and will have eliminated that, in my view, excessive borrowing. If I may again address my remarks directly to my right hon. Friend the Chief Secretary, I merely say, "No slippage, please." That is what Conservative Members want.
My right hon. and learned Friend the Chancellor said that the Maastricht debt or deficit criteria would be met in 1997. That is marvellous, not because it will lead us to a single currency, but simply because it is good housekeeping. I commend the Chancellor, because he framed the Budget for British national self-interest. National self-interest did not die with Parliament's acceptance of the Maastricht treaty, and it did not die yesterday evening at 6.30; it is the concept that should govern the formulation of policy in this country. I want no repetition here of what is happening in France, whose economy is being skewed to reach a single currency, or in Italy, which is attempting to get into the exchange rate mechanism, which I have never liked.
Consideration of the single currency is best left until after the general election. Although I thought that the controversy over the stability pact, which spilled over into the Chamber, could have been better timed, I entirely agreed with what my right hon. and hon. Friends said about the pact's desirability or otherwise.
There is no ambiguity about my position on a single currency. I do not have to wait to take a decision: I am root and branch opposed to it for many economic reasons that I shall outline on another occasion, if I am called—which is not easy these days. For me, it is also a constitutional issue. If the single currency ever sees the light of day here, my response will be no surprise.
We cannot spend on everything, and it is clear that pennies are dropping in Treasuries throughout the globe. The Chancellor was absolutely correct to prioritise spending on health, crime and education. That will be welcomed in my constituency. On health, a problem is developing about emergency cases, which are increasing dramatically.
East Riding health authority wrote to me as follows:
The main cause is the growth in activity and cost arising from an increase in the number of emergency cases which, if they continue as at present, will exceed the contracted level by a further 7 per cent., over and above the 7 per cent. increase last year. This compares with a national growth of 10 per cent. over 5 years 
We therefore have a problem, so I am delighted that the Chancellor is making available additional resources—£1.6 billion next year, I believe—for the national health service.
Perhaps I should say this not to the Chief Secretary but to someone else, but as he is here, I hope that he will hear me when I say that we in the East Riding need our slice of that £1.6 billion and that I shall be knocking on an awful lot of doors to get it. Of course, if the money were not there, I would have no opportunity to ask for my slice. I am delighted that I shall be able to ask for it.
I am a fan of the private finance initiative, particularly in relation to the NHS. How could I be otherwise? There is no question about the value of yet another innovation by the Government. It is clearly working for Norfolk and Norwich, and the Chancellor spoke about the £200 million hospital that would be built, but we are not doing quite so well in East Riding.
Two schemes with a local hospital trust are bogged down because additional information is required, there have been rule changes throughout the period of discussion, and no decisions have been taken. One of the schemes has been on hold for a year, so I wish that the Chief Secretary would kick someone somewhere to make them understand that interest will be lost in the smaller schemes if we cannot learn quickly—I accept that we are on a learning curve—and get reasonably quick decisions.
I was also extremely pleased about the £50 million—I believe that that is the figure—for more capital spending on education. We have a problem in East Riding because of the poor fabric of some schools, and far too many temporary classrooms. I am almost tempted to say that more than £50 million is needed, but my logic prevents me from doing that, as I have been saying throughout my speech that we should cut spending, so I shall not fall into that trap, but merely ask for my slice.
Our economic policy is clearly working: the previous Budget worked, and this one is working. On 6 November 1996, that wonderful chronicle, the Hull Daily Mail, carried the headline, "Bouncing back from recession". It is a bit late, but a good headline none the less. The article says:
Business in the area is bouncing back from recession, according to a key economic survey.
But while sales and orders continue to increase, the partners behind the report warn against overconfidence.
My goodness gracious me, when last did we have to be warned against over-confidence, especially in east Yorkshire? The senior partner of Price Waterhouse, who compiled the report, welcomed
what he sees as evidence of long-term recovery.
If the Opposition heard that from the Chief Secretary or the Chancellor, they might be entitled not to believe it, but it came from an impartial witness. He, I and my constituents can see the recovery. My constituents are beginning to communicate the feel-good factor to me. I say well done to the Chief Secretary and the Chancellor. I give them nine out of 10; I am improving their score. We need more of the same in the next Budget.

Mr. Alan Howarth: The Budget is imprudent, implausible and unjust. It is imprudent in that the Chancellor has poured fuel on the flames by adding direct personal tax cuts to a consumer boom that is running ahead powerfully and with the money supply running way beyond where it should be. We are back, tragically, to the pattern of boom and bust. The Chancellor says that he is staying ahead of the game, but the game will catch up with him. The interesting political question is whether it will do so before or after next April. Assuredly, it will before long, and that will be painful not only for the Conservative party but for the country.
It is especially regrettable that the Budget does not provide for the investment that we need—perhaps above all in education. There is no more important investment


that we can make, both for people's individual opportunities and for our economic competitiveness. The increase in spending that the Government countenance for local education authorities amounts to less than the authorities are spending now.
It is especially sad that the Government have not responded more adequately to the crisis in the universities. They have given some extra resources to the universities and, to that extent, the decisions in the Budget are welcome. Our universities are among our greatest assets and the staff who research and teach in them have well-nigh achieved miracles in maintaining standards against the squeeze in their resources. We all look forward to the recommendations of Sir Ron Dearing; there is no one wiser or more widely respected in the field than he. However, the crisis is urgent and the Government should have done more to enable our universities to improve their obsolescent laboratories and anachronistic libraries.
The cuts in training are also foolish. The Government justify them on the grounds that the unemployment count is falling. The count of the long-term unemployed has not been falling. It is not sensible to add to the planned cuts in training for work or to divert money to project work, the only proven effect of which is to take people off the unemployment register. That is attractive to the Government but there is no evidence that the scheme gets more people into work.
The Budget neglects the interests of the poorest in society. We were all pleased that the widening gap between rich and poor in Britain had stopped widening; that, according to recent figures, the trend of so many years seemed to have been halted. It is as if the Government are now determined that that baleful trend should be resumed. They have lifted the threshold for the higher rate of personal taxation by £600 but widened the band for the lower rate by only £200. The richest 10 per cent. will enjoy a third of the tax cuts; the poorest, less than 10 per cent. of them. People who are earning too little to pay income tax will suffer from the increases in indirect taxation. Unemployed couples will be worse off. The fiscal tightening of the overall Budget judgment will lead to job losses, not least in the construction industry.
As chair of the all-party parliamentary group on charities and the voluntary sector, I am disappointed that the Chancellor has not seen fit to recompense charities for the £13 million loss caused by the 1p reduction in the basic rate and the additional costs of petrol and diesel. The Government do not take a coherent view of the role of charities in social provision, nor of their responsibility to charities. They only ask charities endlessly to do more. With the higher unemployment and the cuts in local authority and training and enterprise council budgets that will flow from the Budget, the work load of charities will increase yet again. Charities appreciate the concession that will enable their trading subsidiaries to gain early tax relief from covenanting profits to the parent charity but how regrettable that the Treasury has again not found it possible to do anything to compensate them for the £1 million a day that service-delivering charities pay in irrecoverable VAT.
Earlier this year, we debated the freeze on one parent benefit and lone parent premium that the Government introduced in the previous Budget and have repeated in this one. I will not dwell on that, therefore, especially as

my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) spoke with equal passion and knowledge about the sad problems that that policy will induce. Conservative Members asked why lone parents should receive larger benefits than do couples with children. It is because it is not appropriate to consider benefits in isolation. We should consider people's overall income position. If we take proper account of the poverty in which so many lone parents and their children live, it is plainly right that lone parents should have higher benefits. It is wrong and foolish to pursue the Government's policy towards lone parent families.
The new rules on benefit claims and the limits on backdating and reviews will prevent many claimants from getting the benefits that they should have. The benefits system is nothing if not highly complex and difficult for claimants to understand. The Government have abolished the freeline that helped 750,000 people each year. It will now be yet harder for people to make their claims fully and accurately in the time required.
The Secretary of State defended the policy of extending the waiting time for jobseeker's allowance to seven days. I think that he said that there were waiting days under unemployment benefit. It is also true—he will correct me if I am wrong—that there were no waiting days for income support paid to the unemployed. In his press release, he vaguely and lamely said:
many people receive some sort of final payment which will cover them for the first week.
How many? He should not introduce the policy without knowing the proportion of people so fortunate. People who lose part-time or casual jobs, who are laid off or who have worked out a period of notice, will lose a full week's jobseeker's allowance, which may be worth well over £100. That will cause them severe difficulty. As the jobseeker's allowance is paid two weeks in arrears, many people will receive no income for three whole weeks. That is wrong.
The cuts in the housing programme are probably the largest proportionate cuts ever to social housing provision. It is peculiar that, in a week in which the Secretary of State for the Environment told the House that England will have 4.4 million more households by 2016, there should be drastic reductions in the public funds allocated to housing provision. Shelter has estimated that of the 4.4 million households, 2.5 million will need low-cost rented housing, but it will not be there.
The measures will be devastating for homeless people. The Government defended their policy in the debates on the Housing Act 1996, which is to be implemented on 20 January, by saying that homeless people would be at no significant disadvantage; the majority of them would reach the top of the list in two years. I fear that the cut in housing provision will make their promises look very hollow. If that policy seems deeply misguided, the further cuts in housing benefit are yet more distressing.
I understand that the Government simply cannot accept an endless explosion in the cost of housing benefit, but rent control through impoverishing tenants is no way to address the problem. By cutting out the support for half the difference between average and actual rent, the Secretary of State will seriously impoverish significant numbers of people. Many people already top up the cost of their rent from their low pay, jobseeker's allowance or income support. Income support is not even set at a decent subsistence level and should not have to be used to pay the rent.
The Government have decided that single people aged between 25 and 60 should, like people under 25, be systematically disadvantaged, if not stigmatised—and all for the sake of £100 million. Single people already face great difficulties in the search for housing. They are on an endless waiting list if they hope to get public authority housing. The priorities of housing associations have naturally had to be to attend to those to whom they have statutory obligations, mainly families with dependent children and pensioners. Houses that are designed and intended for single people may well go to a lone parent with a young child.
Of the 4.4 million new households, we have to expect some 80 per cent., as the Government note, to be single people. The Government argue that they should not endorse that, but it is not right to punish single people and perhaps particularly those who are separated or divorced.
The Secretary of State has said that people on housing benefit will have the choice of paying from their own income for more expensive accommodation, trying to negotiate their rent down, or moving into a home that they and the taxpayer can afford. The Secretary of State has departed from the real world in making those suggestions. The Rowntree new index of private rents shows that in the second quarter of 1996 the average rent in Britain for a self-contained, one-bedroom flat was £87 for a furnished flat and £80 for an unfurnished flat, whereas the average rent for one room in a shared house was £47. That makes a difference of £40 for furnished accommodation. There can be no question of tenants negotiating their rent down by £40 or anything remotely like it.
In any case, single people will not be able to find that accommodation. There are probably five times as many young people under 25 as there are single rooms available in the rented market. It is a landlord's market and it is particularly so, as I know from my constituency in south Warwickshire, in rural areas, where there simply are not single rooms to be found for rent. My observation is endorsed by the recently published research by the Country Landowners Association and the Joseph Rowntree Foundation. In any case, landlords often do not wish to let to tenants on housing benefit. As the Department of the Environment's survey "Private Landlords in England" told us three months ago, some 53 per cent. of landlords prefer not to let to tenants on housing benefit.
I hope that the Government will consider how people will be affected in practice. It will be bad enough as it is for people under 25, but for people over that age who for a large part of their adult life, perhaps 35 years, are trying to make a home and live a settled life, this is a cruel policy. Consider the interaction of the policy with labour market conditions. There are more and more temporary and insecure jobs in our economy. If people take a job that does not work out and lose the job, they will lose housing benefit at the old rate and lose their home. If single people, conscious of that hazard, do not take the job, they will forfeit JSA. That might be described as Lilley's fork.
If someone has to move to smaller accommodation, will they be required to sell their furniture? I know that Ministers do not wish to be unkind, but they have been unimaginative in making the proposals. Consider the position of people—unhappily, numerous and becoming more numerous in our society—who are separated or divorced. Many people divorce when their children have

grown up. One partner loses the married home. The other may find herself unable to keep up with the mortgage. That is already an unhappy situation. The parents are trying to maintain a relationship with their children and to provide somewhere decent, private and stable which their children can visit and where they can stay. Why should such people be pressurised into living in shared accommodation?
Let us consider the thousands of single women who work in the caring professions such as nursing or residential care. They have been content to accept earnings that never gave them any prospect of buying their own home. Do they deserve from us the indignity and distress of being required to move into shared accommodation? Think of the loss of self-esteem for them. Their home has been their haven, and having their private home has perhaps been the condition of their ability to make and sustain relationships.
Consider—this is not a fanciful or sensational suggestion—the predicament of a single woman pressurised by her landlord to offer sexual favours in lieu of rent that she is unable to afford. Consider the position of disabled people who are not so severely disabled as to qualify for incapacity benefits but are not fit enough to fulfil the availability for work and actively seeking work conditions of JSA. With reduced housing benefit, they are now, in addition to their other problems, to lose their home, privacy, dignity and hope.
The policy will drive people into houses in multiple occupation. In 1985, the Department of the Environment conducted a survey which found that 85 per cent. of HMOs were unsatisfactory, in poor condition and perhaps unsafe. There is no reason to suppose that the situation has significantly improved since that time. The Government refused to meet the pleas of voluntary organisations and the Labour party to accept an amendment to the Housing Bill this year to introduce a mandatory licensing scheme for HMOs.
Why should poor people be driven to share with strangers while the wealthy enjoy greater tax cuts, with the promise from the Conservative party to abolish inheritance tax and capital gains tax? The Conservative party makes much of the importance of home and family values, but not, it seems, for the poor. The poor do not deserve to enjoy that happiness in life. They are to be driven into ghettos of squalid, dangerous housing without privacy or stability.
It is interesting and important that the Government have embraced the principle of spend to save. They propose to spend £470 million on an additional attack on fraud and look forward to a return of five times as much as they spend. That is an interesting departure of principle. My right hon. Friend the Member for Dunfermline, East (Mr. Brown) has not, to my knowledge, countenanced in his policy making that the Labour party embrace such a principle. I should like, however, to suggest to the House that the same principle could be applied to welfare-to-work. A sum of £470 million could be spent usefully and constructively. For the same amount, thousands of claimants could be helped to move back to work.
I have tabled a number of parliamentary questions in recent months on this subject. Let me say how grateful I am to the officials who take so much trouble to do the computations.
Instead of removing their special benefits, some help could have been given to lone parents to overcome the barriers to employment. For only £20 million, the Secretary of State could have helped 45,000 lone parents by allowing them to earn up to £25 a week without loss of benefit. Another £10 million only could have tackled the barrier of the cost of child care by offsetting work-related child care expenses for lone parents on income support. For £150 million, the barrier faced by those leaving income support, who lose help to pay for school meals, could be ended by giving entitlement to free school meals with family credit.
Instead of restricting housing benefit, the Secretary of State could have given some constructive help to people trying to go back to work. For only £90 million, he could have helped claimants of income support and housing benefit to travel to a part-time job by offsetting travelling expenses.
Perhaps even more desirable, with half as many disabled people in work as in the general population, the Secretary of State could have considered how to help more people on incapacity benefits to try out work. He could have extended the linking rule from eight weeks to two years. His officials have estimated that that would cost little or nothing.

Mr. Lilley: Will the hon. Gentleman give way?

Mr. Howarth: I have no time. I am sorry.

Mr. Lilley: Come on.

Mr. Howarth: We are running out of time and other hon. Members are waiting to speak.
The Secretary of State could have publicised the possibility of undertaking therapeutic paid and voluntary work while receiving benefit. For just £5 million, he could have helped disabled people on income support by raising the disregard in line with earnings. For another £70 million, he could have reduced the housing benefit taper for disabled people to 50p in the pound.
The Government could have focused more resources on the types of help available from the Employment Service. For just over £14 million, Ministers could have extended the jobfinder's grant to people on incapacity benefits. By spending just £2 million, he could have helped 5,000 disabled people who are starting work to receive extended housing benefit payments.
The Secretary of State could have started to tackle the failure of disability working allowance, which is currently claimed by only one in five of those eligible for it. He could have removed the unfair exclusion from disability working allowance of certain people, just because they have a working partner. A disregard of a partner's income, which would have helped disabled women in particular, would have cost £40 million and doubled the number of current claimants. A minor but worthwhile change would have been to raise the lower savings limit, at a cost of £1 million.
That leaves £68 million with which to use the Secretary of State's piloting powers first to consider how to open access to disability working allowance by changing the

qualifying benefit rules and secondly, to examine the prospects for a partial capacity allowance better to reflect the spectrum between capacity and incapacity for work.
That would have been a different approach—humane, constructive and responsible in the long term. Sadly, it is not the Government's approach, but it will, I trust, be the approach taken by a future Labour Government.

Lady Olga Maitland: I give a warm welcome to the Budget. It was positive, balanced, calm and, above all, it reflected the healthy economy that needs to be sustained and nurtured. It was absolutely right that my right hon. and learned Friend the Chancellor should feel confident about the future, because things have been moving so powerfully in our direction.
Looking at my own experiences down in Sutton, I believe that it is significant that, in the past month alone, unemployment figures moved down by 7 per cent. Indeed, they have now reached the lowest level in five years. That reflects what has been happening nationally. Unemployment has been falling by 450 people a day. That is excellent news. We now have the lowest unemployment rate in Europe. That is a far cry from France, Spain and Germany.
More people in jobs means that more people have money to spend. When I was recently out on the doorsteps of Sutton, several people in a single morning told me, "I've just moved into my new house." The property market is on the move. People are feeling confident—they are spending money on doing up their houses and putting money out into the economy. It is interesting that prices are reflecting that confidence. Gazumping has returned and we have not seen that for a long time. Prices have now risen by between 5 per cent. and 10 per cent. I also welcome the fact that businesses are on the move. Small businesses that I saw struggling to get off the ground only four years ago are now expanding and taking on staff.
Despite all that good news, my right hon. and learned Friend the Chancellor has to be congratulated on not turning the Budget into a cheap election bid. He took no notice of the cartoon, published in The Times on Tuesday, which depicted a man in his pyjamas, kneeling beside his bed and saying his prayers. He said, "And please, let Mr. Clarke make a squalid, cynical bid for my vote." Despite temptation, the Chancellor made no such bid and writers for the leading newspapers had to scour their minds for suitable headlines.
On page 1 of its Budget special, The Independent had a banner headline, "Shockingly responsible". Another of its headlines was, "Dangerously sensible". The Financial Times wrote,
A display of sturdy common sense
and
Clarke praised for his prudence".
Indeed, The Independent capped that by saying,
Meanwhile, the economy ticks towards a boom".
Michael Brunson, the political editor of ITN, said that the Budget would "spread a warm glow".
That warm glow means the lowest direct taxes in 60 years, with the equivalent of 2p off in the pound. That will go down well with my constituents in Sutton, who are


hard-working, uncomplaining and get-on-with-it people. They will greatly appreciate the fact that the average family will be £1,100 richer next year than five years ago.
Yet, despite all that, my right hon. and learned Friend has been able to make sure that we have money available for essential services and plenty left for health. I welcome the fact that £1.6 billion has been set aside for it. I have no doubt at all that St. Helier hospital in Sutton will benefit. Schools will benefit by £875 million, which will help us in our drive to raise standards. It is absolutely appropriate that we should pay due attention to people's sense of security by giving more support to the police and the Prison Service.
My constituents appreciate the fact that small businesses will benefit, because they make up a large proportion of my local enterprises. They will undoubtedly value the fact that corporation tax is down. They will certainly appreciate the fact that business rates are being frozen and, indeed, that the VAT threshold has been increased by £1,000 to £48,000.
The big philosophical difference between ourselves and Labour—one that will never be bridged, matched or copied—is that we believe that the taxpayer should decide how he spends what he earns. We believe that hard work should be rewarded and that he should be allowed to make his own decisions. Labour Members, by contrast, feel that they know better and will make the spending decisions for him. If the taxpayer does not believe that, he should study the 89 firm spending pledges that Labour has already made which will involve increases in public spending—adding up to a whopping £30 billion or £1,200 a year more in taxation—and compare that with our commitment to reduce tax.
Last year, when I spoke in the Budget debate, I focused on the effect that that Budget would have on the family. If you will excuse me, Madam Deputy Speaker, I make no apologies for developing those themes today. As a keen supporter of the traditional family, who have, for years, felt penalised for their responsible behaviour—marrying first and being committed to one another before having children—I give a special cheer that their plight has, at last, been recognised.
It has always been iniquitous that responsible parenting, within marriage, should be given less financial support than the profligate never-marrieds whose numbers are recorded to have doubled in the five years to 1992. The never-marrieds and, indeed, other lone parents—I accept that that category includes women who are not lone by choice but who have been widowed, divorced or abandoned—have put an unacceptable pressure on the social security budget.

Ms Lynne: Will the hon. Lady give way?

Lady Olga Maitland: No, we are tight on time, otherwise I would.
The increase in total spending on lone parents leapt from £1.7 billion in 1979 to £9.4 billion in 1996—nearly half our defence expenditure. In simple terms, that adds up to about £1,500 a year on the tax of a family who are supporting their own children. I believe that the time has come to be more judgmental. The current system has been too tolerant. The current benefit system encourages lone

parenthood over the traditional family with two married parents, by making the former more financially worth while.

Ms Lynne: Will the hon. Lady give way?

Lady Olga Maitland: I cannot—time is against me. Other hon. Members want to speak. I wish I could give way, but I cannot. Please forgive me.
There has certainly been no fear of the consequences on the part of lone parents, who are firm in their belief that the state should take care. That is now about to change and the changes will mark the beginning of a gradual social revolution that will pay greater regard to the traditional family and recognise the benefits that families bestow on society as a whole.
I therefore welcome the decision to end the extra £6.30 a week one-parent benefit given to nearly 1 million lone mothers who, between them, are responsible for one third of all births. That will cease to be available to any new claimant in April 1998. Likewise, at the same time, single parents claiming income support will lose the £5.20 a week premium on benefit payments, which will save the taxpayer about £270 million a year.
In future, lone parents and married couples who are also on benefit will be given even-handed treatment. That is enormously significant and it is the right way forward. I rather regret that the hon. Member for Peckham (Ms Harman) gave the impression that she did not feel that married couples should have equal treatment with lone parents. Indeed, I got the impression that she felt that they should be disadvantaged because they are taking responsibility for their own lives.
It should be noted that the timing of the ending of the benefit is significant. Seventeen months' notice is ample time for a woman to think again before she comes pregnant. The choice is hers. Nowadays, accidents do not have to happen. Unwanted pregnancies are entirely preventable, and single women who fancy the idea of having a baby should think carefully. The question that a single woman should ask herself, and, indeed, her "partner", is: "Which is more fair to the child who cannot protest about the conditions into which he is born—to be born to a mother alone in the world with no means to give him the secure upbringing that he deserves, or to be born into the home with two married and committed parents?"
I believe that the mother should focus less on her own desires and wishes and more on the needs of the child. I also believe that it is time for society to expect and demand more of fathers. This is no time to be tolerant of feckless fathers, for they have, after all, played a key role in the future of their offspring.
Study after study has shown that the life chances of a child born within marriage are considerably greater than those of a child born outside marriage. A child born and raised alone by a never-married mother or divorced parents outside the traditional family is more than likely to suffer abuse, to experience mental and physical health problems and to perform poorly at school, and is less likely as a consequence to get a job later on. There is also a greater likelihood that he or she will become involved in drugs and crime. The largely low-achieving girls are more likely to repeat the cycle and become pregnant themselves.
It has to be said that the problem is exacerbated by creating a generation who turn to the state for help; the dependent welfare culture, encouraged thanks to the non-judgmental politically correct attitudes of the day. The swift handout, the "ask no questions" culture is, in the end, less caring than one that probes carefully and sets clear benchmarks on what is acceptable behaviour.
For the sake of our children, we have no choice but to start tackling those problems head on. By the same token, I look forward to seeing a full restoration of the married couple's allowance. I accept that there has been a modest increase in the Budget this year in line with inflation. I very much hope that when the Conservative Government introduce the Budget next year, they will improve on that. While we cannot force couples to be more loving and affectionate, one can create a climate whereby it is in their interest and that of their families to stay together.
The cost of a full married couple's allowance matching that on the continent would be offset by children growing up in a more stable home and with less likelihood or necessity to call on the state for help. Indeed, in that regard, we should study the experiences of France, Germany, Italy, Spain, Switzerland and even Japan, where families are rewarded by favourable allowances and tax deductions. Generous tax breaks will in the end be less draining on the state than allowing a system to grow that provides little incentive for people to plan carefully how and when to start their families.
The moves put forward by the Budget, to start restructuring the family, are infinitely more profound than the attention that they have received. Over the past three decades, the biggest change on the social landscape has been the changing forms of family on the basis that there is an acceptable choice between marriage and cohabitation, and, indeed, making the treatment of the two choices of equal merit. Indeed, there had been fears that to do otherwise was simply too judgmental.
In the end, we have found that the price has been unacceptably high. There are real differences between marriage and cohabitation and between children born within marriage and those born outside it. Marriages are more stable than informal arrangements. Despite increasingly high levels of divorce, a married couple is more likely to stay together than a cohabiting one. Those who attempt to defend the increasing birth rate outside marriage point out that, at present, half the children born out of wedlock live with two unmarried parents. But cohabitation is no substitute for marriage. Only 16 per cent. of cohabitations last more than five years. That compares with the 10-year average for marriages that end in divorce.
For all those reasons, it is entirely appropriate and consistent with Conservative philosophy that we should be brave and bold in our support for traditional marriage. At a time when so much is changing so fast, the family remains for many a source of stability. Most ordinary families have not lost their bearings. They want to live by the familiar civilised rules. What has broken down are the official structures to support them, with the consequent burdens on the state.
The measures proposed by my right hon. and learned Friend the Chancellor might seem harsh to the young woman who decides to go it alone and have her baby

outside marriage, but in the end it is infinitely kinder to that child to discourage those free-wheeling arrangements, ensuring that he has a greater chance of being born into a traditional family who are willing and able to care fully for him.
The Budget is worth while. It is significant. It is yet another step on our road of economic success and prosperity. I have absolutely no doubt that, come the general election, my constituents will have no hesitation in ensuring that they give their support to the Tory Government, in whom they have complete confidence for a secure financial future.

Mr. Paddy Tipping: I have the privilege of being a neighbour of the Chancellor, which gives me the opportunity to watch him deliver his Budget—both the style and substance of it—in Nottingham and London. I have the opportunity to see him play both at home and away, and, like all football teams, one changes one's tactics, and the Chancellor certainly does. Last year, he told the local paper, the Nottingham Evening Post, that the Budget was
a cash bonanza for Nottinghamshire".
The reality was different. The Queen's Medical Centre in Nottingham, a hospital of international renown, will not carry out any elective surgery this month or the next, and will announce redundancies before Christmas. A survey of Nottinghamshire schools has shown that the number of classes with more than 30 children has trebled in the past year. It is quite clear that people are paying for the 22 tax rises since the last election.
This year, according to last night's Nottingham Evening Post, the Chancellor has taken a different approach.
Puffing a cigar (up 7p a packet) and sharing his Scotch (down 26p a bottle) Chancellor Kenneth Clarke was in buoyant mood when he spoke to the Evening Post … in the library at No. 11 Downing Street.
I contrast that buoyant approach with the attitude of the hon. Member for Sutton and Cheam (Lady Olga Maitland). Some people are well housed and can smoke cigars and drink whisky; but others do not have much and, in all good faith, we should try to help them.
Is this a buoyant Budget for Nottingham and the nation? The theme of today's debate has been social security, so let me start there. In the run-up to this Budget round, considerable pressure has been put on the Secretary of State for Social Security to take account of chronic bronchitis and emphysema, and to extend the range of industrial injuries to acceptance of the recommendations of the Industrial Injuries Advisory Council. I am grateful for the fact that the Secretary of State has done that. The cost has been £20 million in the first year, plus £5 million in administrative costs. The benefit will start on 1 April next year.
Last week, I had an opportunity to go to the Department to argue the case for retrospection. I will continue to press that case. I know that it will cost £70 million, but I think that a debt is owed to men who have given their health and, in some cases, their lives to giving coal and comfort to all of us. If the criteria are right on 1 April, there is a strong argument for backdating the benefit to 1993. The matter will have to come before Parliament, and new regulations must be passed, but the Secretary of State can be sure that the campaign will continue. Miners in


Nottinghamshire, and in coalfield communities throughout England, Wales and Scotland, have argued the case for better benefits; the campaign will not go away now, and I am pleased that the Secretary of State has heard its case.
Let me now refer to another issue that affects people with disabilities, in Nottinghamshire and nationally. The Budget increased the special tax allowance for blind people by more than the rate of inflation. I welcome that, but I wonder whether the Secretary of State will consider extending the provision to other disabled people, if only to mitigate the worst effects of the early taxation of incapacity benefit. The Disablement Income Group wrote to the Chancellor, who, in January 1996, replied that the blind person's allowance was anomalous, and was always
regarded very much as a special case confined to a section of the community who command considerable public sympathy and who are readily identifiable.
He went on to reject the idea of extending the benefit.
There is a strong case for re-examining that issue, and looking at a range of people with disabilities. I hope that the Secretary of State will at least agree to listen to the representations of the Disablement Income Group. I feel that people who are in work with real disabilities often need extra help, and that one way of helping them is the granting of tax allowances rather than benefits.
An aspect of the Budget that has received considerable attention is the issue of local government finance, and, in particular, education spending. The Chancellor commented on the toughness of the public spending round, saying:
we had to keep the rest of public spending within the tightest possible limits".—[Official Report, 26 November 1996; Vol. 286, c. 158.]
The consequences of that statement are now becoming clear to local councils in Nottinghamshire and throughout the country.
Only yesterday, the Secretary of State for the Environment also accepted how difficult things would be. In a press release, he said:
Even in the climate of a tight settlement, the provision for next year will allow them"—
the councils—
to meet priority needs across the range of their functions".
I stress the words "priority needs". That constitutes a recognition of the fact that not everything can be done—that hard choices must be made, and that some services will have to be cut.
The problem springs directly from a reduction in the amount of external finance that the Government are making available to councils. The Red Book makes it clear that, between now and 31 March 2000, councils will lose £4 billion. As a consequence, council tax will have to rise. There is nothing new in that; it is a direct result of planned Government policy. The Government's stated intention is to switch the burden of local taxation from central Government back to local government.
Given the large reduction in grant, it is clear that the council tax is set to rise by 20 per cent. in the next three years. It has been suggested that that is equivalent to 2p on income tax. The Chancellor gives with one hand and takes away with the other. I believe that the council tax will rise next year by 6 per cent. The Government set the level of expenditure for local councils, they can cap

each council and they provide 80 per cent. of the funding, so if council tax rises by more than double the rate of inflation, in all fairness the finger of blame should be pointed at them, because they hold all the strings.
Ministers argued that it is important to give schools priority in any budget settlement. Indeed, the Budget allows an extra £633 million to be spent on education—a 3.6 per cent. rise. Many local authorities will passport that through to schools, because they accept that schools are a priority. As the Chancellor and I know, Nottinghamshire has announced that it will give schools priority, as it did last year. That is important.
Class sizes are rising. I undertook a survey in north Nottinghamshire earlier this year, which showed that half the classes had more than 30 pupils, and eight out of 10 schools have class sizes of more than 30. The extra money will not, by itself, reduce class sizes. Individual schools have used balances to keep class sizes down. Those balances have now gone, and, on top of that, pupil numbers are rising.
As a consequence of giving priority to education, other council services will be cut. The 2 per cent. cap increase for most county councils, including Nottinghamshire, is tight and restrictive. Nottinghamshire will be allowed to spend £13.5 million. It will spend £10.9 million of that on schools, which will leave £2.5 million for all other services. That implies a 5 per cent. cut in the other services provided by the county council.
I do not believe that that cut can be covered by efficiency savings alone. Efficiency savings have been made year after year, but ultimately there will be no more to be made. I expect that highway maintenance will be reduced, day centres for the elderly will close, meals-on-wheels will be reduced, the fire brigade will be put at risk, libraries will reduce their opening hours and adult education and discretionary awards to students will become virtually non-existent.
The Budget provides an extra £500 million capital for education. Let me put that in context. To repair Nottinghamshire schools would cost £110 million. In Rushcliffe, the Chancellor's constituency, there is £6.7 million-worth of outstanding repairs. The school closest to his home, Rushcliffe comprehensive, has £1.5 million-worth of outstanding repairs.
In Nottinghamshire, services will be cut and the council tax will increase. It is the same old story: we have to pay more for fewer services. Should the Chancellor be so buoyant about the Budget? It is all very well to drink whisky and smoke cigars at No. 11, but what about the consequences of the rest of the Budget? It gives with one hand and takes away with another. It takes 1p off income tax, but insurance premiums are up, air passenger tax is up and council tax will go up.
What highlights the Budget for me is the increase in the threshold for inheritance tax from £200,000 to £215,000. It shows what an unequal society we have. One could buy a house in Newstead, Nottinghamshire, for £15,000. We are a divided society, racked by insecurity.


It is a society in which many, including single parents, need new homes, but the Budget does not provide those new homes. What we need is new life, new hope and a new Labour Government for Britain.

Mr. Geoffrey Clifton-Brown: I am delighted to be called to speak in the debate this evening, Madam Deputy Speaker. When I first entered the House I spoke in the Budget debates for the first two years; I am delighted to reconvene the habit. Like my right hon. Friend the Chief Secretary in his expenditure target, I am being squeezed, so I shall just make a few brief remarks from what I had intended to be a much longer speech.
I am delighted that my right hon. and learned Friend the Chancellor has come back into the Chamber. I have a few words of praise for him. This is a welcome and restrained Budget, building on five years of successive growth—which is no mean achievement after the deep recession at the beginning of the 1990s. It is a cautious Budget. My right hon. and learned Friend could well have been tempted to produce a Budget with a huge bribe to the electorate in the hope of winning the next election. However, he has had a successful tenure of office building a sound enterprise economy for jobs and growth and it is important to continue on a sound path of growth so that there is more money in the economy to spend on the services that are needed most. I am delighted to note that Britain has one of the highest growth rates in the European Union—2.5 per cent. compared with an EU average of 1.5 per cent. That is no mean tribute to my right hon. and learned Friend.
My right hon. and learned Friend's speech was in marked contrast with that of the Leader of the Opposition, who spent his entire speech criticising our policies, but not saying one word about Opposition policies nor giving one figure for the cost of any of their policies. Are they committed to their stated aspiration of a lower tax rate of 10p? What will that cost? I understand that it might cost up to £8 billion, but we have not been told. As we move towards the next election, the Opposition's policy of non-speak will become less and less credible—they will have to come clean with their policies.
There are many positive policies in the Budget. In particular, I welcome the help for businesses. The freeze on the uniform business rate will be very welcome to small businesses in Gloucester, Cirencester and Tewkesbury. What a contrast that is with a future Labour Government. The Opposition have already expressed a wish to repatriate business tax to local authorities, and we know what happened in the past when local authorities taxed the job-creating small business sector out of existence. There are now many, many more small businesses than there were in 1979, employing 1 million more people. That is precisely the sort of economy that I want in Britain.
Cirencester has an unemployment rate of, staggeringly, below 7 per cent. The local radio said the other day that Cirencester could become the first town in England technically to have no unemployment. That would be

unbelievable. The rate is falling month on month. Come the next election, the national unemployment figure will be below 2 million. That is a very creditable performance.

Mr. Nicholas Winterton: Will my hon. Friend give way?

Mr. Clifton-Brown: No. I have very little time—in fact, precisely eight minutes.
My right hon. and learned Friend the Chancellor has built on his success as an environmentally friendly Chancellor. As a member of the Environment Select Committee, I welcome that very much. Fiscal instruments are a good way of promoting environmentally friendly behaviour—for example, the successful switch by the public to unleaded petrol. My right hon. and learned Friend built on that, among other measures, by reducing vehicle excise duty for low-emission lorries and reducing duty for ultra-low sulphur diesel. I welcome those measures, which build on his landfill tax last year, which is already causing many of my constituents to consider how to recycle their household waste. We must go on introducing such measures if we are to look after our planet's health for our children.
In his Budget, my right hon. and learned Friend announced other welcome fiscal measures. In particular, I welcome his renewed commitment to abolish capital gains tax and inheritance tax. That is a worthwhile long-term project. I hope that, in his next Budget, he will be able to produce a long-term and a short-term capital gain because that is a much more satisfactory way in which gradually to abolish capital gains tax.
Perhaps my right hon. and learned Friend might even consider a new base year of 1997. All pooled share purchases might be abolished after that date and every batch of shares purchased would then be indexed in its own right. We could have a short and long-term gain for the assets. I favour a tapering rate. Those that were held only for a year or two should be taxed nearly at the marginal rate of income tax, so that people who make short-term gains are still taxed almost as if it were income, but people who had held gains for five years or more would have to pay no capital gains tax.
I am nearly certain that inheritance tax will be a target for a possible incoming Labour Government. One of the ways in which they will radically alter the tax is to abolish the so-called PETS—partially exempt taxable transfers. That would return us to the bad old days of capital transfer tax and Denis Healey taxing the rich until the pips squeak. We all know what happened: the assets simply went offshore and were not there to be taxed. Nowadays, we do not have the exchange controls of the 1960s and 1970s, so that money would disappear offshore all the quicker.
Time is moving on, but I should like to mention the expenditure side of the Budget. A warm tribute must be paid to my right hon. Friend the Chief Secretary. To cut £1.7 billion off the expenditure total was no mean achievement. It needs to be warmly welcomed.
My only note of caution is that more than half the projected increase is to be spent on social security. This year, a staggering £80 billion will be spent on social security. That increase should have been distributed a little more evenly, particularly on to education and health. It is interesting that it is the Conservative party that is able to promise a year-on-year real increase in health


expenditure, yet we cannot obtain such a simple commitment from the Labour party. I wonder how much it really is committed to our caring services.
In line with other hon. Members, I should like to comment on expenditure as a proportion of GDP. My hon. Friend the Member for Beverley (Mr. Cran) mentioned that. My right hon. and learned Friend has committed himself in the longer term to getting the rate below 40 per cent., which is to be warmly welcomed. The Red Book shows that, in 1975, under the last socialist Government, the figure rose to a staggering 47.25 per cent. Whenever we have taken over from a socialist Government, we have always had to sort out the economic inheritance that they have left behind. I do not want to have to face my electorate in five years' time with a dreadful economic position. Therefore, I hope—and am confident—that we will be able to continue with a Conservative Government.
Returning to expenditure, I believe that we can and should do something about social security expenditure. Recently, I have written a paper, published in conjunction with the Bow Group, on how to privatise the state pension. It is possible to have a privately funded pension for every person in the land, whether they are working, are housewives or are out of work. When they retired, they would have a decent standard of living and would be empowered to live their lives properly, because they would have a private pension behind them.
That is no fly-by-night idea. It has been proposed by the Chilean Government, and it is in operation in Chile, Australia and elsewhere. Each person would be allowed—indeed, compelled—to make a small pay-as-you-earn contribution into a privately funded pension. For those starting work, the contribution need be only £6 a week, which is a very small sum to establish a properly funded state pension that is equivalent to today's state pension. Due to the efficiency of the private sector, it is more than likely—it happened in Chile—that such pensions would be worth considerably more at the end of a 40-year working life.
As the Chileans discovered in the five years after the scheme was introduced, the huge funds invested in the pension funds enabled the doubling of the growth rate of the Chilean economy. I believe that the same could happen here. There was a recent leak about the state earnings-related pension scheme becoming a funded pension. I have no idea whether there was any substance to the leak, but I urge the Government, as a first step, to consider that proposal.
I have been able to make only a few remarks in the debate, but I welcome this Budget. It is a Budget for growth, for jobs and for prosperity. Above all, it is a Budget on which my right hon. and learned Friend can build—in his next appearance with the red briefcase—an even more prosperous society.

Mr. Mike O'Brien: May I begin with a brief tribute to the right hon. Member for Worthing (Sir T. Higgins)—he is not in the Chamber—who said that today's speech was probably his last in a Budget debate. In his many years in the House, he has always taken a very keen interest in Treasury issues, both in the Chamber and in the Treasury Select Committee. His analysis has always been rigorous, if not always right, and we shall miss his contributions to future Budget debates.

However, perhaps there is a bright side for us in his leaving—I see that he is returning to the Chamber—because I am sure that he would have become a stern critic of the Government after the general election.
The right hon. Gentleman need not worry; I was not suggesting that he was one of the Back Benchers to whom the Chancellor referred today on the Jimmy Young show, when he mentioned disloyal Tories on the Back Benches. The right hon. and learned Gentleman said that
the problem lies with some of those people on the Back Benches in the Conservative party in Parliament. You can lead a party, John can lead a party, but there are sometimes parties that are simply not capable of being led. And if the Back Benches of the Conservative party would only come to their senses and stop writing rubbish like that in Tribune we could beat this … Labour Party".
What a blast against his own Back Benchers—by a Chancellor who expects them to troop through the Lobby in support of his tax-raising Budget!
I suppose that the Chancellor no longer minds saying such things. Perhaps he knows that Tuesday's Budget was the last throw of the dice by an increasingly discredited Government. He attempted to disguise the Tories' string of broken promises on tax—the legacy of 17 years of Tory rule. It was a Budget not for the future of Britain but for the short-term interests of the Tory party.
We have heard it all before, have we not? In 1992, just before the general election, we heard the Tories' promises of tax cuts, promises of more for schools and health and promises of an economic miracle—promises, promises everywhere, and every one of them was broken. After the election, there were 22 Tory tax rises, an increased tax burden and VAT on fuel—with an attempt to double it. Conservative Members all trooped through the Lobby then, voting for higher taxes.
This is another tax-raising Budget. The Budget Red Book shows that, overall, in 1997–98—between this year and next—£350 million more will be raised in tax. The overall tax burden will rise from 35¾ per cent. of GDP this year to 36¼ per cent. next year. This was a give-with-one-hand-and-take-with-another Budget. Seven taxes were increased and a new tax was introduced extending VAT at 17.5 per cent. to travel insurance, car hire insurance and other insurance.
The hon. Member for Luton, South (Sir G. Bright) mentioned that insurance companies were coming to his constituency. I bet that they are not praising him for supporting higher insurance taxes.
There have been seven tax increases. Council tax rose by £4 billion. Tax on insurance premiums rose from 2.5 per cent. to 4 per cent. Air passenger tax has doubled, meaning that a mum, dad and two kids taking a trip abroad could pay £80 in tax on their holiday. The abolition of tax relief on profit-related pay is possibly the equivalent of up to 8p on the basic rate of income tax for someone on average wages, affecting 3.75 million people in the long term. Prescription charges were increased, fuel duties rose by 5 per cent. above inflation and, as the Chancellor said yesterday, tobacco duties rose by 3 per cent. above inflation.
As a result of the Tory tax changes since 1992, a typical family will have paid more than £2,120 extra tax by the time of the next general election. The tax burden is forecast to rise next year and every year until the year 2000 and beyond. So much for promises.
The hon. Member for Colchester, North (Mr. Jenkin), in his own personal manifesto at the last general election, set out
Ten good reasons to vote Conservative.
No. 4 was "lower taxes". After the election, he voted for the biggest peacetime tax increases in British political history. When I raised the matter with him, he claimed that he was referring only to income tax. However, he did not say that in his election address; he referred simply to lower taxes.
The hon. Member for Sutton and Cheam (Lady Olga Maitland) told her electorate:
The Conservatives arc pledged to low taxation".
Again she made no distinction between direct and indirect taxes. After the election, she voted for Britain's highest ever tax increases. She claims to be the champion of families, but she voted for VAT on fuel at 8 per cent. and tried to double it to 17.5 per cent. She pledged low taxation, but all that happened was a shift from direct to indirect taxation, leaving the burden on families.
The Economic Secretary to the Treasury pledged to her electorate, "We want lower taxes". That is not exactly a pledge, but she made no distinction between direct and indirect tax. A tax raiser too since 1992, perhaps she can explain her pledge to the electorate in her reply to the debate.
The hon. Member for Rochdale (Ms Lynne) cannot get away with it either. She made promises without responsibility, including double pensions at Christmas. The hon. Lady seemed to be spending her penny more than once. Does that mean that the 1p on income tax to pay for the Liberal Democrat education budget will have to be cut? I doubt it. Promises come cheap when they do not have to be delivered.

Ms Lynne: No doubt the hon. Gentleman saw our alternative Budget and he will be aware that we costed it. We shall also cost our general election manifesto. Just because the hon. Gentleman is upset that his party will not join us in the Lobby and vote against the cut in income tax or make any commitment on spending, he has to attack a party that will.

Mr. O'Brien: Yes. The Liberal Democrats are in the business of putting a higher tax burden on ordinary families. Do they not understand that we already have the highest taxing Government in British political history? The Liberal Democrats seek to raise taxes even beyond those of Britain's highest taxing Government ever. Is that a record of which to be proud? I think not.
Let us not forget the hon. Member for Beverley (Mr. Cran), who is not concentrating on the debate. He read out a letter from a Mr. Chatwin, pleading not to impose a windfall tax on the privatised utilities. I bet he did not read out constituents' letters when they asked him not to put VAT on fuel at 8 per cent. or when they asked him not to increase it to 17.5 per cent. The privilege of having a letter read out went to the director of a privatised utility, not his constituents protesting against VAT on fuel as he voted for that.
My hon. Friend the Member for Peckham (Ms Harman) described VAT on fuel as the unkindest tax of all. The Tories introduced it at 8 per cent. and tried to double it to

17.5 per cent. but we stopped them. We shall cut VAT on fuel from 8 per cent. to 5 per cent.—as low as possible. It will be a manifesto commitment. Labour will cut that tax which the Tories imposed on the British people. Before the last election, the Prime Minister promised no extension of VAT. Once he was elected, that promise was broken. The Tories cannot be trusted on taxes. The difference between the parties is that Labour promises to cut VAT on fuel and we will deliver on it.
Seventeen years ago, the Conservative party took office committed to getting the state off people's backs, lowering taxes and creating greater prosperity. Over the years, the corruption of power held for too long has led them to betray every ideal that they ever had. Those who rule in the name of Conservatism now have accrued power to themselves in Whitehall, undermining local democracy and local councils and concentrating decision making in the hands of central Government. They have voted through the biggest tax rises in British political history, including 22 rises since the last election. They have presided over the two worst economic recessions since the war, including allowing Britain to fall from 13th to 18th place in the international prosperity league. We shall not forget to keep reminding people of that.
Besides betraying the people of Britain, the Government have also betrayed themselves, their ideals and the constituency workers who have knocked on doors on their behalf. The Chancellor delivered the Budget with all the panache of a second-hand car salesman selling a dodgy motor. The rhetoric was grand, but the economy that he was selling had real problems that have not been dealt with. Despite all the rhetoric, the Budget increased taxes. The penny off income tax and the other allowance measures were more than offset by increases in indirect taxation.
The price of their economic failure is not just the betrayal of the voters on tax. That price is also being paid by the disadvantaged in this country. The Conservatives claim to care, but by their acts we know them. Today we have heard about cuts in some benefits, particularly those to lone parents.
It is a great personal tragedy when a healthy man or woman who wants to work cannot find a job and support their family, as my hon. Friend the Member for Norwich, South (Mr. Garrett) said so well in his contribution to tonight's debate. Unemployment can strip a person of dignity, self-respect and hope. It can make them lose faith in the future.
In recent years, we have seen a growing group of people in this country becoming bereft of that hope. They are the millions who have been left behind and show no signs of catching up—the casualties who huddle in the centre of London and our other cities. They are Britain's shame because they are our fellow citizens. We ought to create a society in which we can give them hope and a stake in the future. No nation can afford to waste its citizens or assign a group of people to the margins of existence. Only when the conditions of misery and injustice that breed hatred and despair are challenged can we achieve anything like a better society.
Today, the Government have made life even more difficult for the forgotten poor of the Tory years—the unemployed and lone parents. While the Government have spent the past year defending the abuses of the highly paid directors in the privatised utilities—the Sir


Desmond Pitchers of this world, whose share options were worth £453,000, and the 40 executive directors who made more than £100,000 in share options in the past year—and have been prepared to reduce the capital gains tax payable by the utility directors, who will gain millions of pounds on share options, they announced today that they would cut benefits for the unemployed, the poor and lone parents. It is a bizarre morality that claims that society needs to provide incentives for the rich by paying them more and incentives for the poor by cutting their meagre income.
Today, we listened to the words of the Secretary of State for Social Security. They were the cold antiseptic words of a privileged man from a warm office, calculating without compassion that the underprivileged can make do with less. For lone parents he offers not the chance of a job, but the certainty of a cut in their standard of living that will hit their child as well as themselves.
In a powerful contribution, my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) told the House that lone parent families constituted one family in four in Scotland. She graphically told us the high price that today's families will pay for the Secretary of State's announcements.
My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) also told us in an effective contribution that families in his constituency—in my county—would be hit hard by today's announcements. Likewise, my hon. Friend the Member for Sherwood (Mr. Tipping) set out the impact of Government policy in his area—a mining area like my own. At a time when we have just heard that one third of the children in this country live in poverty, the cold antiseptic voice of the Secretary of State for Social Security delivered greater poverty for the children of lone parents.
As my hon. Friend the Member for Peckham said in her excellent speech, one in three children in this country are born into poverty. In 1979, it was one in 10. A national survey by the Health Visitors Association found widespread child malnutrition and poor living conditions. Nearly one third of health visitors found tuberculosis among their clients last year. Two thirds encountered iron deficiency, 93 per cent. had to deal with gastroenteritis and 4 per cent. dealt with reported rickets. They also found a high number of households where gas, electricity, telephone and water were cut off—the majority of those households included children. This is the international year for the eradication of poverty, and today, the Secretary of State for Social Security has contributed to the growth of poverty.
We should not be surprised by all this because Tory Britain has one of the highest proportions of workless households in the developed world. Under the Tories, one in five households of working age are without work and 11 million people have suffered a period of unemployment since the Prime Minister took office—one in four of the working population. There are still twice as many people unemployed now as there were in 1979, despite 32 changes to the statistics. The rate of job creation in Britain since 1979 ranks eleventh out of the 15 European countries. Half the work force have experienced part-time, temporary or insecure work or unemployment. Despite that, one of the Ministers with responsibility for employment has described job insecurity as a myth and the President of the Board of Trade has described it as a state of mind.
If the Tories really want to cut the cost of benefits, they should realise that the best way of doing so is to put people back to work. That would make all of us better off by cutting the cost of welfare. That is why a Labour Government will concentrate on putting the unemployed back to work, taking the initiative and acting to improve opportunities. That is why the Tories simply blame the unemployed for their plight.
Instead of offering hope to 250,000 young people without jobs, the Secretary of State for Social Security offers them the despair of lower income and reduced opportunities. While Labour proposes ladders of opportunity for lone parents and job opportunities for the young and unemployed, the Conservatives prefer to perpetuate the prejudices of their most uncaring Members of Parliament against the poor.
The choice in this tax-raising Budget is the same choice as we will face in the general election, because the Budget was really all about the election. The choice is clear. It is between perpetuating a Government of cynics, diluted by non-entities, and making a new start for Britain under Labour. It is between seeking the low-wage, low-skill economy proposed by the present clique in office, and investing in the skills, technology and innovation that will open for us a future route to competitiveness. It is a choice between the short-term economics of Tory boom and bust and the stability of fiscal prudence, which are the precondition for growth in the 21st century and offered by Labour.
The choice is between the Conservatives, who see advantages in increasing inequality in the name of free enterprise, and Labour, which will fight growing inequality as an economic imperative. Only those societies in which all can have a stake in the future can succeed. The choice is between the Tories, who talk more and more of reducing ties with Europe—with the exception, perhaps, of the Chancellor—and Labour, which sees our future economic success being closely tied to our European partners.
The aim of the Budget, of course, is to portray it as something different—as a choice between those who will give tax cuts for the future and those who will not. That is a false choice for two reasons. First, due to their record on taxes, the Tories will never be trusted again on that issue by the British people. Secondly, it is a false choice because Labour is not and never has been the party that would impose high taxes on ordinary people. For Labour, public spending is not an end in itself; it is a means. The real end is improving the quality of life of ordinary people. No one can argue that imposing VAT at 17.5 per cent. on fuel—a policy proposed by the Conservatives—would benefit ordinary people. Few would argue that 22 tax rises—the price of the Tory Government's economic failure—have benefited the people. They have left the people with the highest taxes in history.
We are living in the dying days of a morally bankrupt, intellectually incoherent and internally divided Government. For more than a year, the whole purpose of Government business has been to try to lay traps for the Opposition. They have nothing to say on the important issues facing the country. The Budget is not about the future of Britain; it is about the future of a small clique of politicians gathered around the Prime Minister. The sooner the Government go the better. Then Britain can have a new start under a new Labour Government. There is now a great urgency for that change and the people


want the election to come sooner rather than later. The budget has demonstrated the enormity of Tory failure. While they dawdle in the same old ruts, the people are looking forward to charting a new course. Labour will give them that opportunity. Let the election be called now so that we can give Britain hope again.

The Economic Secretary to the Treasury (Mrs. Angela Knight): I must tell the hon. Member for North Warwickshire (Mr. O'Brien) that that was a dreadful rant. My hon. Friends will have noticed that the hon. Gentleman shouted that all our taxes are too high, but he had another line when he dropped his voice lower and, in hushed tones, he intoned that spending was too low and benefits were too low. Well, one or other is bogus and the hon. Gentleman and his party must learn to be honest. The Opposition must learn to say what it is that they mean to do and, if they are so frightened that they are not prepared to cost their pledges, I can assure him and his colleagues that we will cost them and ensure that everybody knows.
I am grateful to my hon. Friends for their excellent contributions in this debate. I shall say a few words to them in reverse order. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) made some thoughtful comments on pensions and I have read his booklet with interest. My hon. Friend the Member for Sutton and Cheam (Lady Olga Maitland) made some useful remarks on the family and her concerns for the family are well known. I wish to apologise to my hon. Friend the Member for Beverley (Mr. Cran) for missing his speech, but I was speaking to my children on the telephone at the time. I watched him on the television and his speech was, as normal, entertaining. I was pleased to hear that the Budget improved during his remarks from eight out of 10 to nine out of 10 by the end. My hon. Friend the Member for Erith and Crayford (Mr. Evennett) made his normal vigorous speech and I thank him for it. My hon. Friend the Member for Colchester, North (Mr. Jenkin) gave his customary intellectual and, indeed, probing contribution, as did my hon. Friend the Member for Luton, South (Sir G. Bright).
My right hon. Friend the Member for Worthing (Sir T. Higgins) said that this was his last aria in the Budget debate. I believe that nothing is over until the fat lady sings, but I am not sure that that expression is appropriate to our slim-line colleague. My right hon. Friend asked me why there were so many forecasts for such a long way ahead in the Red Book and he referred me to table 4A.9. The answer that I have found out for him is that table 4A.9 is not a forecast, it is a projection. The difference between a projection and a forecast is apparently not only semantics. Projections are broader and more illustrative, thus output and inflation projections are the same for 1999–2000, 2000–2001 and 2001–2002. The reality of the answer is probably that the Treasury do it that way because it has always done it that way. I suggest to my right hon. Friend that perhaps he should come up and see me some time, to borrow a well-known phrase, so that we can discuss it.
This Budget reinforces the growing confidence that we have seen in recent months. It takes no risks but concentrates on sustained economic growth, which is the

best guarantee of higher living standards. It increases public spending on the services people care about—hospitals, doctors, schools and police—and it keeps spending under firm control. It fights the social security cheats and other fraud, it takes another step towards the basic 20p income tax rate and it helps small businesses. I make no apology for the fact that we took the difficult decisions when we had to. Some were politically unpopular, but if we had not taken them we would not have the stable, secure and growing economy that we have today.
The Opposition opposed the very measures that have brought about this country's economic success. Last year, when we brought down the basic rate of taxation, what did Labour Members do? They huffed and they puffed, they agonised and they squirmed, and eventually they came to an amazingly brave decision: they abstained. What a decisive party the hon. Member for North Warwickshire belongs to.
The hon. Gentleman and his hon. Friends have ranted on about their mantra of the 22 tax increases. That is juvenile economics—the economics of the kindergarten. Their list includes some increases in fuel duties, which are good both fiscally and environmentally, and it counts one tax, insurance premium tax, four times.
The hon. Gentleman criticised air passenger duty and said that it would cost mum, dad and two kids rather more to take a holiday abroad. When the Labour party was in power, if people could afford to go on holiday abroad at all, it was probably for 10 days in Benidorm, and all that they could take with them was 20 or 30 quid, because of the state of the British economy. I am delighted to say that mums, dads and kids throughout the country can now go to many different destinations. What is more, they can take with them as much money as they want, because our economy is sound and so is our currency.
We have made 25 Tory tax cuts. Interestingly, the Opposition never want to talk about those. For example, in last year's Budget personal allowances went up, as did the lower rate band and the basic rate limit, and the basic rate of income tax was reduced to 24 per cent. Those changes reduced taxation and the tax burden on people. Indeed, this year's Budget has brought the basic rate of income tax down again.
At the general election I said to my electorate that we wanted lower taxes. That is why I am delighted that we have brought income tax down from 33p to 23p in the pound. I am delighted, on my constituents' behalf, that we have a large 20p band into which more than one quarter of earners fall. I am also delighted that people are better off by £370 as a consequence of this year's Budget, and by £1,100 since 1992. That is an excellent record.
The hon. Member for North Warwickshire talked about the tax burden, but I must tell him that the tax burden increases because of buoyancy in the economy, and because of measures to block tax loopholes. It increases because we have intensified the drive against tax evasion, which means that tax due will become tax paid. The hon. Gentleman should try to learn a bit more about economics.
I draw the hon. Gentleman's attention, and that of every other hon. Member, to some of the charts in the Red Book, which has been so extensively quoted. For example, table 2.1 shows how high inflation was at the end of the 1970s, and how low it is now. I refer the hon. Gentleman to page 29, which shows how the total wealth


of everybody in this country is increasing, and to page 132, which shows the swingeing taxes on individuals that we have reduced.
We have an excellent record, and the British economy is now well into its fifth year of sustained growth. We have already enjoyed a stronger, longer and steadier recovery than any other major European country. Independent forecasters expect Britain to be the fastest growing major European economy both this year and next.
We are looking forward to the prospect of six years in which Britain will have outperformed Germany and France. People are experiencing a good economy. Even the Hull Daily Mail and the Long Eaton Advertiser agree. We are feeling it in every town and village in the country.
Moreover, inflation has stayed low, which in many previous recoveries did not happen. My hon. Friend the Member for Erith and Crayford rightly pointed out the necessity to ensure that inflation is low. Inflation has been below 4 per cent. for more than four years—the longest run of low inflation in almost half a century. That has allowed interest rates to fall to historically low levels, and mortgage rates are at their lowest for a generation. That is another set of excellent statistics, and another good record.
I am not hung up or obsessed with league tables, as seems to be the case with the Opposition. Contrary to the stories we often hear, Britain is outperforming its main competitors and climbing up the international league tables that really matter. Japan was the only major G7 industrial country to achieve faster growth in GDP per person over the past international cycle. The United Kingdom is the No. 1 destination for inward investment, and we have received as much inward investment as Germany, France and Italy put together. We have the lion's share of Europe's most successful companies. Over the past international cycle, investment growth was more than in any other major European country. We have climbed from the bottom to the top of the manufacturing productivity growth league.

Ms Eagle: Will the Minister give way?

Mrs. Knight: No, I will not.

Ms Harman: Why not?

Mrs. Knight: Because I have heard enough rubbish from Opposition Members. I am tired of hearing them talk down this country and paint an untrue picture. Scarcely a week goes by without another international company deciding to set up in Britain.
Opposition Members go around the country giving the nod and the wink to every group. They have offered long-serving teachers a year's sabbatical—the lion. Member for Sheffield, Brightside (Mr. Blunkett) has said it, the National Union of Teachers believes it and that is why we have costed it at £1.3 billion. Labour cannot deny that. During yesterday's debate, Opposition Members spent most of their time talking about the need for their local authorities to spend more money. They are committed to lifting capping, and it is worth saying that a 1 per cent. increase in spending by local authorities will cost more than

£1 billion. Opposition Members are all asking for that extra money to be spent, but spending that money will cost every individual in the country. I have a—

Mr. Brian Wilson: Vision?

Mrs. Knight: I do not have a vision. [HON. MEMBERS: "Oh!"] I have a considerable concern. If—just if—the Labour party was ever in No. 10, the union tanks would roll up Downing street with their guns pointed towards the door. The unions would ask for those nods and winks—what Labour calls "aspirations" but what those to whom they promised them call "spending pledges". What does one think would happen? Every person in the country knows that Labour would agree to what was being demanded, with the consequence that economic growth would halt, people would no longer be better off, inflation would rise and jobs would be lost. That is the reality of what the Labour party has been saying during this and every other debate.
The hon. Member for North Warwickshire and his colleagues waxed lyrical about a windfall tax, and he apparently believes that such a tax will hurt nobody and is somehow morally sound. No doubt next week a windfall tax will cure tooth decay, too. The reality is that a windfall tax will cost investment and jobs, and it will cost pensioners because many pension funds invested in the privatised utilities. Labour Members have waxed hysterical about VAT on fuel and power, but the hon. Member for Edinburgh, Central (Mr. Darling)—an Opposition Front-Bench spokesman—has said that reducing VAT from 8 per cent. to 5 per cent would be a
cynical ploy from a desperate party".—[Official Report, 23 January 1995; Vol. 253, c. 49.]
My right hon. Friend the Secretary of State spoke with great feeling about social security and rightly pointed out that we have an aging population that will cause pressures on the social security budget. A baby girl today has a life expectancy of 80. That is excellent: if that is the average, think what the maximum could be. It is a tribute to good food, a good environment, increasing prosperity, a social security network, a high standard of living, an excellent health service and a Conservative Government.
I am delighted about the measures that have been outlined for the "spend to save" initiative on fraud. I am sure that many people will agree that the hon. Member for Peckham (Ms Harman) spoke mostly drivel; when she was not talking drivel, she came out with a series of scare points. For example, I did not hear her say that Labour would restore the lone parent premium. I did not hear any Labour Members say that they would honour the expensive list of promises from the hon. Member for Stratford-on-Avon (Mr. Howarth).
What Labour Members promised was a national minimum wage, which they said would not cause job losses. What a lot of rubbish. The majority of research, both here and abroad, supports the Government's view that it would lead to considerable job losses, especially among young and unskilled workers; the only issue in dispute is the size of the losses. We believe in creating jobs, not in putting people out of work with such promises and proposals.
On the single room rent scare, an individual who loses a job has 13 weeks' protection, which is not what the hon. Member for Peckham said. Someone who becomes single


as a consequence of death has 52 weeks' protection, which is again not what she said. There is a fallback discretionary fund that will be operated by the local authority to help hardship cases.
The hon. Lady made extraordinary personalised allegations against my right hon. Friend the Secretary of State about landlord fraud. Several important steps have been taken against landlord fraud, and she knows that he introduced them. By not withdrawing her allegations, she has shown that, in every sense of the word, she is not a gentleman.
The hon. Member for Rochdale (Ms Lynne) had a list of promises as long as not only her arm but both arms. She said that the Liberal party had a costed programme in its alternative Budget. The costed programme makes wonderful reading. It refers to spending cuts of £670 million, but does not say where from, and to savings on tax evasion and avoidance of £320 million, but again does not say where from. The only point on which I agree with the hon. Member for North Warwickshire is that the penny has been spent not once on education, but four or five times.
Our proposals will help to create jobs. Many hon. Members mentioned lone parents, and our commitment to families is an important element of our overall approach, which is why we have announced our intention to move gradually towards more even-handed treatment of one and two-parent families.
We have a series of important, useful and effective ways of helping individuals back into jobs. Easily the best way to help people, lone parents or otherwise, is to get them back into work. Project work, work skills, parent plus, the child maintenance bonus, earnings top-up and other programmes are in place.
We have an excellent record on jobs. Employment has risen by nearly 800,000 since the recovery began. We have more people in work than any other major European country. That has all happened against a background of change. All developed economies face the twin challenges of technological development and the expansion of global trade. The changes affect Britain as they do other countries. They affect us whether we work in heavy industry, the high street, services or manufacturing. The question is not whether we face change but how we deal with it. We have dealt with it in Britain in a way which has meant—

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

Fairfield Piggeries

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]

10 pm

Mr. David Faber: I am grateful for the opportunity to raise the issue of Fairfield Piggeries in Bradford-on-Avon on behalf of hundreds, even thousands, of my constituents, who have for years had to put up with appalling smells and environmental harm. I regret the need for this debate, which comes at the end of several years of consideration by West Wiltshire district council and the Department of the Environment. I hope that it will mark the culmination of my correspondence with the Secretary of State and the communication between the council and the Department.
It may be helpful if I explain some of the background. Fairfield Piggeries has been running under its current ownership for some 50 years, and has 5,000 pigs. Several people have suggested that people who live in the countryside near farms should learn to live with agricultural smells, but the smells concerned are not those of the pigs but of the waste rendering process, about which we have heard much during the bovine spongiform encephalopathy scare.
The smell is noxious; it is industrial and chemical rather than agricultural. There are two rendering cookers on the site for the waste that is brought to it. One heats up waste food—vats of butter, bread, pizza, cakes; anything that can be got rid of locally. The second, more controversially, renders dead poultry. The carcases of turkeys and chickens are left on the site in skips. The resulting liquid feed is pumped through pipes to 5,000 pigs. The fumes should, technically, be removed by a biological filter bed.
In recent years, the smell from the plant has broken out way beyond the boundaries of the farm. The community of Bradford Leigh suffers an almost permanent nuisance, especially in summer when it becomes stifling. In summer, people driving past have to wind up their windows, children cannot play in gardens, and local residents cannot open their windows at night. The main reason for this debate is the delay in my right hon. Friend the Secretary of State's redetermining the appeal of the owners of the piggeries.
In October 1992—more than four years ago—the piggery owners applied to West Wiltshire district council for authorisation to carry out the rendering process, as required under the Environmental Protection Act 1990. The council refused authorisation and, in March 1994, the owners filed an appeal against the council. On 23 and 24 August 1994, a section 15 public appeal hearing was held in Bradford-on-Avon and the Secretary of State's inspector, Mr. Jarvis, heard evidence from the main parties, local residents and organisations. Naturally, he also visited the site. He concluded that the company was unlikely to be able to carry on the rendering process so as to comply effectively with the Environmental Protection Act 1990. He also concluded that the crucial test of the management practices was being failed because the emissions should not have caused an offensive smell outside the process boundary. My right hon. Friend the Secretary of State's own inspector recommended that the appeal be rejected.
West Wiltshire district council then had to wait 12 months for my right hon. Friend's decision, which came on 2 August 1995. He overruled his own inspector. He upheld the appeal by the company and directed West Wiltshire district council to issue authorisation. There was concern at the time that the condition relating to offensive smells was left out of the authorisation, even though it had been agreed by both parties at the appeal hearing.
In September 1995, the council went ahead to judicial review. It was heard by Mr. Justice Spence on 6 March 1996. At the hearing, my right hon. Friend's decision was considered in great detail. The judge decided that the Department's reasoning was poor, that the inspector's recommendations had not been acted on and that no recognition had been made of the crucial issue of the smell outside the site boundary. The judge found in the council's favour and referred the matter back to the Department of the Environment for redetermination.
West Wiltshire district council received notification of the redetermination in a letter from the Department of 12 March this year and complied with the deadline for comments of 3 April. A second round of representations was requested in a letter of 1 May, and again it replied within the deadline set, which was 20 May. Since then, in spite of telephone calls from the council to officials, and letters from me to my right hon. Friend the Secretary of State, no timetable has been set for the decision to be made.
I wrote to my right hon. Friend the Secretary of State on 14 March. On 2 April I received a reply from my hon. Friend the Under-Secretary of State for the Environment. He set out the process for redetermination and acknowledged my representations, but the letter contained no timetable for the decision. In a telephone call to the Department, the council was informed that the decision would take weeks rather than months to achieve. We are now at the end of November, and still no decision has been made.
On 11 July, I wrote again to my right hon. Friend, saying that I felt that the council had been tolerant in its use of language, given the extreme delay in the decision. I also pointed out that we were then well into the summer months, by which time the smells were noxious and extremely bad for local residents.
On 5 August, I received a reply from my hon. Friend the Under-Secretary of State for the Environment, the Member for Croydon, Central (Sir P. Beresford). He said that the appeal was being considered
as quickly as possible given the available resources, as we are very conscious of the nuisance caused by animal rendering plant in hot weather. I hope that a revised decision will issue in the very near future.
I wrote again to my right hon. Friend the Secretary of State on 19 September at some length, following a further visit to the site the previous day. At that stage, I described the delay as intolerable and suggested that I might resort to this Adjournment debate.
My hon. Friend the Under-Secretary replied on 7 October, this time with a new excuse. He said:
officials in my Department are giving this work the highest possible priority … they, remain acutely conscious of the nuisance animal rendering plant can cause, and thus the urgency of reaching a new decision … A number of the officials responsible for drafting it have also been occupied on urgent and unavoidable BSE-related work, which was not foreseen in March when the court made its decision. As a result, the redetermination has taken rather longer than we expected. although a decision is now in sight.

As I understand it, my right hon. Friend has two options. He can accept his inspector's report and the judge's decision and refer the matter back to West Wiltshire district council for it to give authorisation or not, or he can uphold the appeal again and reach the decision by different means, as the judge criticised the way in which the decision had been reached rather than the end product. West Wiltshire district council would then have to decide whether to go back to court.
What we are debating tonight, and the issue that I wish to raise with my hon. Friend the Minister this evening, is the on-going delay, which is simply unacceptable for everyone involved. I stressed earlier that the issue was not an agricultural smell but the smell of an industrial process.
The smell is chemical, not agricultural. The debate is not designed to criticise those who own and work at Fairfield Piggeries. The delay is every bit as bad for them as it is for everybody else—they are unable to plan; they have no idea of whether they will be closed down in the near future; and they do not know what level of investment will be required of them over the coming months. My view, which I have made clear to my right hon. Friend the Secretary of State and to local people, is that it is impossible for them to carry on the rendering process as they are and that the damage they are doing to local people's environment is simply unacceptable.
It is possible that a programme of investment such as that suggested by the district council could alleviate the problem. I understand that improvements could be made in two areas: first, a lobby building on the end of the main building where the waste enters would act as an airlock; and, secondly, improvements could be made to the abatement plant by installing one or more extra filter beds to stop the smells resulting from the rendering process.
As I said, the debate is about the inordinate length of time that my hon. Friend's Department is taking to come to a decision. Between June and September 1994, the local district council received 255 complaints from local people; in the same period for 1995, 251 complaints were received; and in the same period this year—the hottest summer months—the figure rose to 392 complaints. Local residents are justifiably angry. People who live near the piggeries cannot open their windows; their children cannot go out and play during the summer; the value of their houses has been affected; and, naturally, many have justifiable concerns about the effects on public health.
Apart from the anger expressed locally against those who own and run the piggeries, much anger is now directed at my hon. Friend's Department because of the length of time that it has taken to reach a decision. The delay has had a seriously detrimental effect on the local environment and on the company's ability to plan for the future. For the district council, it has been a frustrating process and I pay tribute to the way in which the council has dealt with the problem.
As a district council, it has its own set of specifications for the level of service it offers—it provides detailed response times and complaints procedures for local council tax payers. If the council falls out of line, the Audit Commission and the local government ombudsman are always available to investigate any mistakes. No such sanction is available to local people in respect of the Department of the Environment. The district council's hands are tied. Under the Environmental Protection


Act 1990, it is unable to intervene as long as the issue is with my right hon. Friend the Secretary of State for redetermination.
I believe that the Department's delay in reaching a decision—it is now nine months since the judicial review, after which the judge sent the case back to my right hon. Friend for redetermination—is wholly unacceptable. The problem has been going on for years, which is too long for everyone involved. It is almost nine months since the court hearing and several years since the first appeal was made, yet no end is in sight.
Even if my hon. Friend is unable to announce a decision tonight on the Floor of the House, I urge him to come up with some idea of when a date will be given for the appeal process to end. That way, some stability can be given to the owners of the plant, to local people and to the district council, so that they can plan ahead.

The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): Hon. Members will have gathered that this is a matter of considerable interest to the constituents of my hon. Friend the Member for Westbury (Mr. Faber), who have complained of the smell from Fairfield Piggeries. It is self-evident, from the history that my hon. Friend outlined, that he has followed developments for some time with close interest and that he has been assiduous in representing his constituents' interests.
I congratulate my hon. Friend on securing this debate on the subject of Fairfield Piggeries. He clearly described what the piggeries consist of—they are a combined animal and vegetable rendering process. Such processes have the potential to cause severe local odour nuisance, and my hon. Friend described what happened in this case. It is clear that my hon. Friend, West Wiltshire district council and the Government are of one mind—that this odour problem must be sorted out. However, we have so far disagreed on the best means to bring that about.
Like all animal rendering processes, that at Fairfield Piggeries is subject to local air pollution control, which is a scheme for the prior approval of polluting processes, brought in by the Environmental Protection Act 1990, as my hon. Friend rightly said. Under the scheme, renderers are required to obtain an authorisation from their local authority to continue operating. In common with all process operators, renderers have a statutory right of appeal to the Secretary of State against, inter alia, any refusal by a local authority to issue an authorisation, and any of the conditions that have been included in any authorisation that is issued. In this case, West Wiltshire district council is the authorising body.
I shall deal first of all with my hon. Friend's concerns about the time that it is taking to redetermine this case, before moving on to explain the considerations that cases such as this raise and how the Secretary of State approaches them.
The operators of Fairfield Piggeries applied for an authorisation for their rendering processes in late 1992; they were refused by West Wiltshire district council in September 1993; they appealed against the council's refusal to the Secretary of State in March 1994 and,

following a public hearing in August 1994, the Secretary of State directed the council to issue an authorisation in August 1995.
Notwithstanding the fact that the Secretary of State's decision was that stringent conditions should be included in the authorisation that he directed the council to issue, to bring about a rapid improvement in the long-standing odour problems at the site, the council decided to seek judicial review of that decision. In March this year, the High Court determined that the Secretary of State had failed to give adequate reasons for his decision, which was then quashed. The Secretary of State immediately embarked on a redetermination of the case, and the current position is that we expect a decision shortly. I shall say a little more about that in due course.
Understandably, my hon. Friend, West Wiltshire district council and the local people are concerned to see the case redetermined as rapidly as possible. Until there is a new decision, the council is effectively unable to take steps under the local air pollution control regime to have the process upgraded or shut down.
All that I can say is that my Department is extremely conscious of the urgency of the case and that we are doing our very best to reach a new decision as rapidly as possible.
To cast light on the matter, it may help if I explain to my hon. Friend that, in March, the High Court did not attack the Secretary of State for having upheld the appeal. It quashed the Secretary of State's decision because the letter did not adequately set out the reasons why he had upheld the appeal. I hope that my hon. Friend and West Wiltshire council are aware that the redetermined decision may be to uphold the appeal as before, and that it is not a matter of the High Court having told the Secretary of State that he must refuse the appeal. The Secretary of State will reach, as quickly as possible, whatever decision is right in the light of the inspector's report and all the other evidence before him.
I clearly cannot comment about the specifics of this particular case, because it is still before the Secretary of State for redetermination. However, I can make some observations, which I think will be helpful, about the policy considerations on which the case hinges, which I hope that those with an interest in the matter will find useful.
The first and most important policy consideration is that the Government are determined that animal renderers must improve their odour control, using the best available techniques not entailing excessive cost. A guidance note has been issued detailing the extensive odour control measures that the Secretary of State would expect existing or new processes to take, the aim being that there should be no smell at the process boundary.
Although the expectation is that an existing process that gives rise to smell problems would be authorised and required to upgrade along the lines set out in the process guidance note, it is, of course, possible for regulatory authorities to refuse to issue an authorisation at all. The Government would expect a refusal to be very much a last resort, and to be backed up by cogent evidence that the process operator is not able to mend his ways in the manner envisaged by the legislation.

Mr. Faber: Can my hon. Friend confirm that part II of the Environmental Protection Act 1990—which deals


with waste management licensing—enshrines the principle of the owner of the property or the owner of a process being a "fit and proper person", whereas part I of the Act, which deals with the authorisation of the processes that we are discussing, makes no such mention of the qualification of being a fit and proper person?

Mr. Clappison: I think that my hon. Friend is right about that. Part II, to which he referred, deals with waste management, and being a fit and proper person has an important role to play in that. Part I deals with the authorisations for air pollution control that we are talking about in this instance. The considerations in that regard are somewhat different, and directed toward avoiding the problems outlined by my hon. Friend. They are concerned particularly with the ability of the person controlling the operation to bring the problems to an end. I shall deal with that problem in a moment.
As I said, the Government expect refusals to be very much a last resort, and to be backed up by cogent evidence that the process operator is not able to mend his ways in the manner envisaged by legislation. Refusal is not at all common, but it is, of course, what happened in the case of Fairfield Piggeries.
The Environmental Protection Act—in a way, this deals with the point that my hon. Friend has just raised—envisages the possibility of refusal of an application for authorisation. Section 6 states:
An application shall not be granted unless the enforcing authority considers that the applicant will be able to carry on the process so as to comply with the conditions which would he included in the authorisation.
In the Secretary of State's view, an enforcing authority should first ask itself, "What conditions would be included if this process were to be authorised?" and then, "Is the applicant able to comply with them?" focusing on the applicant's ability to comply.
When we do encounter refusals to grant authorisation, section 6(4) is usually cited by the enforcing authority as the reason, as was the case with West Wiltshire when it declined to authorise the Fairfield Piggeries process. All too often, however, the enforcing authority will tell the person concerned, effectively, "You have not complied with conditions in the past; therefore, we do not consider that you are able to comply with the conditions that we would include in any authorisation."
I am afraid that that is not the right way forward. The enforcing authority has to consider the applicant's ability to comply, not his track record. The track record is, of course, a useful indication, but it is usually far from being sufficient evidence in itself to justify taking away someone's livelihood—which is usually what is at stake in such cases. It is simply not good enough for an enforcing authority to say, "This applicant has operated with too many smell problems in the past; therefore he is not capable of sorting them out in the future."
It is the Secretary of State's practice—although not that of such enforcing authorities—to apply his mind to the test set by the legislation, that is, the applicant's ability to comply with the conditions that would be included in any authorisation. Often there is little or no evidence directly bearing on that question. Attitude and past performance may be pretty clear, but ability or otherwise is difficult to establish. In such circumstances, the Secretary of State's policy is to give the applicant the benefit of the doubt.

It would not be defensible to take someone's livelihood from him because of unsubstantiated doubts about his ability to comply with conditions.
My hon. Friend may say that this is a little hard on those who must put up with the effects of an applicant's being given the benefit of the doubt in that way. As I said, he has been assiduous in the matter. But the beauty of the 1990 Act system is that, once an authorisation has been issued, people no longer have to put up with unacceptable behaviour. That may be of some assistance to my hon. Friend's constituents. Failure to comply with conditions is a criminal offence, carrying swingeing penalties on conviction, while continued unacceptable behaviour on the part of a polluter can lead to revocation of his authorisation by the enforcing authority. It is possible that one or more of the operators given the benefit of the doubt as to "ability" in that way will, having been authorised, subsequently turn out quite rapidly not to have been worthy of authorisation—but that is not in itself a reason not to give such operators a chance to clean up their act.
I have taken careful note of my hon. Friend's wish for a decision on the appeal to be issued as a matter of urgency—

Mr. Faber: I entirely understand what my hon. Friend is saying, and agree wholeheartedly that the benefit of the doubt should be with the person who is carrying out the operation. I have no desire for someone's livelihood—or the livelihood of those who work for that person—to be taken away unnecessarily. I hope that my hon. Friend appreciates that that has not been the tone of my speech or of the debate. I have merely sought to point out that the process of appeal, judicial review and redetermination has now been going on for several years, and that that is unacceptable to those who run the plant, to the local people who are suffering the smell and to West Wiltshire district council.
I endorse much of what my hon. Friend has said, but what we want locally is a decision one way or the other, so that the district council knows where it stands. It needs to know whether it must encourage the owners to make the required investment to bring their plant up to scratch, so that the smells can be eliminated. All we want is a date or a time in the near future when the redetermination will be complete, so that everyone knows where they stand.

Mr. Clappison: My hon. Friend has been reasonable, not just this evening, but in all his communications on the matter. I understand his concerns.
I can assure my hon. Friend on two points. First, I can assure him on the general policy on conditions, and the severe consequences that will follow from a breach of conditions. Secondly, I have listened carefully to the points that he made. Although I cannot give him a date here and now, I can assure him that I shall closely consider the timing, bearing in mind the reasonable points that he made about the importance of time. I shall examine how the matter is being handled. I shall do my best to ensure that a decision is made as soon as possible. I shall take a close interest in the matter, to reflect the close interest that he has taken throughout.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes past Ten o'clock.